Interest rate held at 5%
The Bank of England’s Monetary Policy Committee (MPC) has voted to keep interest rates at 5%.
The MPC voted 8-1 to maintain the rate. One member preferred to reduce the Bank Rate by 0.25 percentage points, to 4.75%.
The 5% rate will remain for at least another month as the next MPC review isn’t due until November 7.
The move comes the day after it was revealed that the rate of inflation was stuck at 2.2%.
Neil Rudge, chief banking officer for commercial at Shawbrook, said: “The BoE opted not to cut rates this month, indicating it is awaiting stronger recovery signals after last month’s reduction before making any further moves. While this may be disappointing for the business community, it’s crucial to remember that the MPC’s decisions are aimed at ensuring long-term economic recovery and sustainable growth.
Despite the continued higher costs of borrowing, business leaders remain optimistic. We see robust demand for funding from midsize businesses across a range of sectors, reflecting widespread confidence and a focus on growth among the UK’s SMEs. As economic conditions improve, more businesses with a forward-looking approach are beginning to activate plans that were previously on hold, which is an encouraging sign for the UK economy’s future prospects.”
Yesterday, the US central bank, the Federal Reserve, brought interest rates down by 0.5 percentage points to 4.75% to 5%, among fears that the world’s largest economy is on the verge of a downturn. It was the first cut in four years.
