MPC votes to hold interest rates
THE Bank of England held interest rates at 0.5% today in the face of ongoing uncertainty in the global economy.
Disappointing growth figures had raised questions over whether the Bank should consider expanding its quantitative easing programme but the Monetary Policy Committee voted to maintain it at £200bn.
The decision to hold interest rates had been widely forecast as concerns about the rate of CPI inflation have been replaced by worries over the strength of the economic recovery in the UK and the ongoing Eurozone crisis.
Coverage of the MPC’s interest rates decision is brought to TheBusinessDesk.com’s readers in association with stockbrokers Redmayne-Bentley.
David Scott, senior stockbroker at Redmayne-Bentley, said: “Following on from increasingly poor economic data both at home and abroad, as the Eurozone debt crises moves into an even more worrying stage as Italian and Spanish bond yields move into the danger zone, the decision to keep rates on hold comes as no surprise.
“It also comes on the same day that the head of the country’s fiscal watchdog Robert Chote said that growth had been weaker than expected in the first six months of 2011 and in order to get to 1.7% this year, which is central to Government spending targets, we will need quarter-on-quarter growth rates of 1% in the second and third quarters of 2011, which nobody expects.
“The consensus market expectation is currently 1.2% growth this year. I expect the minutes will reveal that discussions took place on how to help revive the economy but with very limited options, that can only mean the printing of more money , as actual and real interest rates remain at generational lows.”
