Interest Rates Held at 0.5%

The Bank of England‘s Monetary Policy Committee has voted to keep the bank base lending rate at 0.5% and there will be no further quantitive easing. The decision comes as no surprise but the degree to which members of the MPC voted will only become apparent when the minutes of today’s meeting are published. The last meeting of the MPC saw two members vote for a rise in the base interest rate, which is becoming in increasingly likely as ways to rein-in inflation are sought. The last inflation rate figure, 3.7% in December 2010, is nearly double the target figure of 2%. With the UK economy in a surprise 0.5% decline for the last quarter of 2010, there are fears that economic growth could be stifled by high inflation, led by fuel and food prices, but the historically low interest ... »

Interest Rates Kept at 0.5%

The Bank of England‘s Monetary Policy Committee has held the base interest rate at 0.5% for a record 18th consecutive month in a row. With continued concern over the state of the economy amidst sharp cuts in public spending by the new coalition government the decision was welcomed by David Kern, Chief Economist at the British Chambers of Commerce, who commented: “The MPC made the right decision by leaving interest rates and the quantitative easing programme unchanged this month. However, uncertainty over future interest rate policy is damaging confidence. Businesses cannot properly plan for recovery without clear knowledge that rate rises will be off the agenda for an extended period.” “Global risks of an economic setback appear to be worsening, so the welcome news ... »

Bank of England holds Interest Rate

The Bank of England‘s Monetary Policy Committee (MPC) has, once again, kept the base interest rate at 5 per cent for the fourth consecutive month in a row. The decision on whether to cut, maintain or increase interest rates has become increasingly difficult as The Bank of England has maintained a policy of "wait and see" with the state of the UK economy. After last month’s decision to hold rates at 5 per cent the minutes show that seven of the nine MPC members voted to hold the interest rate whilst one member called for a cut and one other for a rise in the cost of borrowing; that’s the first 3-way split since May 2006. The MPC admitted that the economy "remained fragile" in the midst of rising costs for small business, big business and consumers alike... »