The new Omicron variant of coronavirus has increased the likelihood of the Bank of England holding back from raising interest rates this month, according to economists and traders in financial markets.

Analysts expect a majority of members of the BoE’s Monetary Policy Committee to decide at their meeting on December 16 that they need more time to evaluate the implications of Omicron, and will vote to leave rates on hold at the historic low of 0.1 per cent.

Economists are unsure about the BoE’s likely response to new information about Omicron after the central bank surprised markets by not raising rates in November, despite surging prices of goods and services. But many think the MPC will hold fire this month even if the new variant is expected to increase inflationary pressures.