No change for King’s last rate meeting

POLICYMAKERS at the Bank of England opted to maintain the status quo at the last interest rate meeting presided over by Governor Sir Mervyn King.

The rate was held at 0.5%, which has been the trend for more than four year and any change was considered unlikely, especially with recent surveys indicating that the economy appears to be picking up as it heads into the second half of the year.

The manufacturing and service sectors have both seen pick-ups over the past month and other economic indicators while not declaring green shoots, are nevertheless more encouraging.

Sir Mervyn, who retires at the end of the month after a 20-year career with the Bank, has seen his tenure correspond with one of the most volatile economic periods in living memory.

Mark Carney, who stepped down as Bank of Canada governor last week, takes over as new Governor on July 1. 

Stephen Gifford, CBI Director of Economics, said: “The evidence of a budding recovery continued to build over the last month, so the MPC’s decision to hold off from further monetary stimulus was broadly expected.

“Despite this week’s disappointing lending figures, conditions should continue to improve as the Funding for Lending Scheme gains traction, which will further support household and business spending.

“We still see the MPC holding fire on monetary policy until Governor Carney takes over.”