Bank holds steady on rates

THE Bank of England’s monetary policy committee has opted to hold rates again.

MPC members erred on the side of caution and opted to hold rates at 0.5% and maintain the asset purchase programme – quantitative easing – at £375bn.

The decision came as after the July purchasing managers index for manufacturing jumped to 54.6 from an upwardly revised 52.9 in June. A reading above 50 indicates growth. This is the strongest reading since March 2011.

Inflation rose 0.2% last month to 2.9%, further from the Bank’s 2% target. New governor Mark Carney avoided having to write to Chancellor George Osborne to explain the hike as he only has to do so if it hits 3%.