Certainly looking more likely after this morning's retail sales figures, which were much stronger than expected.

What it does show is that a huge proportion of Christmas period spending was done over the internet, something that had been greatly under-estimated.

The Bank of England might feel they have to make a move to curb the potential inflationary pressures on February 5th with a 0.25 hike from 3.75 to 4.00.

But will this prediction be any better than your Bin-Laden one ;)

Nope!! :p

people don't take 'too much' notice of a .25% hike, a .5% hike will make people stop and think about their spending more than two 2.5% rises. I think to curb stupid spending, a 'shock and awe' ;) rise may need to occur.

Probably wrong though, who knows. Almost as tricky to predict as property prices.

PMSL at the google ads :(

Multiple sclerosis and gorrillas :) It's not the topic, it's not me....

but wouldn't a base rate rise increase the £/$ exchange rates making UK exports to the US even less attractive?

The comitee apparently voted 8 to 1 against a rise this month

Not quite that clear-cut towzer. The balance between our visible and invisible trade balance with the US is a fine one. Although the MPC would take that into consideration, it wouldn't usually be the primary determinant.

If the rate does go up by whatever % how is that likley to affect the £:$ rate?

Personally, i reckon $/£ will still go higher if they do hike, on the basis of further hikes later on in the year.

If they do nothing, i can't see Cable doing much, as expectation would just be pushed back to March.

So unless there's a wholesale reversal in the dollar's fortunes between now and then, i see limited downside to sterling.

My weekly Barclays briefing assumes a 0.25% rise in February, with at least 2 more 0.25% rises this year.

Gonna be some pain for those who can't stop spending at a greater rate than its coming in.....

Hugh

If rates do go up much more, there is no way Gordon Brown will make 3% growth this. His tax revenue forecasts now look evry shaky and anything less than 3% will give him a huge hole in the government's spending programme.

Current rates must be crippling anyone selling to the US. BoE will be very mindful of Forex effects of a rise, so fingers crossed.