Breaking news: MPC holds interest rates
INTEREST rates were held again at 0.5% by the Monetary Policy Committee today despite concerns over inflation.
The Bank of England’s rate-setting committee also chose not to expand the £200bn quantitative easing programme.
Their decision means interest rates have now remained unchanged for two years.
Coverage of the MPC’s interest rates decision is brought to TheBusinessDesk.com’s readers in association with stockbrokers Redmayne-Bentley.
Senior stockbroker David Scott said: “Whilst three members of the MPC, at the last rates meeting, voted for a rate increase, with one arguing for a half point rate increase, the decision to hold rates comes as little real surprise.
“The Bank of England continue to maintain that inflation will fall away later in the year, although recently surging oil prices may be starting to undermine this argument. They are also acutely aware that the economy contracted 0.6% in the last quarter of last year and the Government austerity tax measures kick in April and this is as public sector jobs are reduced.
“Whilst recent numbers on construction and manufacturing have been encouraging, the service sector continues to be weak. Since its independence in 1997 the Bank of England has only once changed interest rates in the budget month of March and that was two years ago when it slashed rates to 0.5% and launched its experimental quantitative easing programme. Market expectations are currently for an interest rate rise of a quarter in the coming months with May currently being the favourite month.”
