A man holds his mobile phone outside the Bank of England in London, Britain, October 17, 2017. REUTERS/Hannah McKay
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The Bank of England looks set to step into the unknown Thursday, when it is expected to raise interest rates for the first time since 2007 at a time when growth appears weaker than before any other rate rise of the past 20 years.Quarterly growth of 0.4 percent offers the weakest backdrop to any rate rise since the BoE became independent in 1997 .Almost all economists polled by Reuters last week expect the BoE to raise interest rates to 0.5 percent from 0.25 percent Thursday. Most do not expect another one next year and 70 percent said even one rate rise would be a mistake. Unemployment has repeatedly fallen further than the BoE forecast in recent years, while wage growth has remained stubbornly around 2 percent, half the 4 percent rate associated with pre-crisis rate rises.Bank of England forecasts showing inflation is still expected to exceed its target even after three years might be the clearest sign that the BoE thinks faster rate rises are needed, Buckley said.
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