Breaking news: MPC holds interest rates
THE Monetary Policy Committee maintained interest rates at 0.5% today for the 25th consecutive month.
The Bank of England’s £200bn quantitative easing programme also remained unchanged.
Pressure has been growing on the MPC to take action as inflation remains stubbornly above target but there remains concern about the fragility of the economic recovery.
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: “As anticipated, the Bank of England has maintained UK interest rates at 0.5%.
“The last published minutes from the Monetary Policy Committee stated that there was no significant shift in the balance of risk to the medium term inflation forecast, indicating that the Bank may look beyond the current inflationary pressure.
“Core inflation is currently running at 4.4%, significantly higher than the 2% target. Members still voted 6-3 in favour of retaining the historically low rate. The problem is, of course, that UK economic growth has yet to gain traction and the MPC does not want to stifle the nascent recovery with premature increases in the cost of borrowing.”
Ian McCafferty, CBI chief economic adviser, said: “With inflation edging upwards, and additional cost pressures in the pipeline, questions over the underlying pace of growth leave the Bank of England in an unenviable position. Not surprisingly, they’ve elected to wait until things become a little clearer before setting their course towards any rises.
“There are conflicting messages about the low level of consumer confidence versus brighter prospects for certain sectors, which continue to cloud the issue. No doubt the MPC is waiting for further signs that the recovery is back on track before changing its stance.”
