UK interest rates stay at 5.25 percent
by Elaine Frei
The Bank of England’s Monetary Policy Committee decided Thursday to leave the interest rate at its current level of 5.25 percent for at least another month. Most analysts expected the decision, as a Reuters poll showed only 9 out of 64 surveyed thought that the rate would go up this month. However, many analysts believe that the Bank will raise rates again in April or, if not then, in May.
The MPC had a number of issues to look at in making their decision. Inflation is currently at 2.7 percent in the UK, well above the government target of 2 percent. Despite recent rate hikes, retail sales remain strong according to the British Retail Consortium. Manufacturing is stronger than expected, as new figures from the Chartered Institute of Purchasing Managers show. The housing market has remained fairly robust, despite rate hikes and warnings that house prices are beginning to be out of reach of some potential buyers.
On the other hand, growth in the service sector was slower than had been expected according to the most recent survey by CIPS. The MPC had to try to figure out exactly how much spare capacity there is in the UK economy and how fast it can grow without sending inflation higher. When the minutes of Thursday’s meeting are released in two weeks, the public will be able to see exactly what went into the MPC’s deliberation over these issues.
Discuss this in the Finance Markets forums
Story link: UK interest rates stay at 5.25 percent
Add to Bookmarks:
Related financial stories to: UK interest rates stay at 5.25 percent
- Australian dollar sees fall as interest rates expected to stay
- ECB raises interest rates; BofE holds rates firm
- Interest rates on hold at 5.75%
- Bank of England raises interest rates
- Interest rates up in UK, Eurozone
- Bank of England holds interest rates steady
- US raises interest rates
- Interest rates on hold at 5%
- ECB raises interest rates, while BofE holds steady
- Interest rates on hold at 5%
Previous: « Debt levels could rise for homeowners
Next: House prices up again in February in UK »
Visited 548 times, 1 so far today
