Will the Bank of England be the next central bank to surprise the financial market with lower interest rates? Quite possibly. Going into the BoE meeting, the factors supporting a rate cut include weaker growth, a deteriorating housing market and a sharp increase in LIBOR rates. Arguments in favor of unchanged rates center on inflation which remains at very high levels. The last time the monetary policy committee met, seven out of the nine voters supported unchanged rates while two voters wanted to cut rates. The big question at hand is whether or not a rate cut can or should be delayed until the New Year. Recent comments from Mervyn King and Rachel Lomax reflected the central bank’s reluctance to lower interest rates because they were afraid that if they lowered rates to 5.50 percent they would have a much more difficult time keeping inflation near their target level. If the BoE cuts interest rates, the British pound could test 2.0.