BoE keeps interest rates on hold
The Bank of England’s (BoE) Monetary Policy Committee (MPC) has today elected to keep UK interest rates on hold at the historically low level of 0.5% for the 17th consecutive month, as widely expected.
Furthermore, the Bank opted not to inject any more funds into the economy via its quantitative easing (QE) scheme – introduced to stimulate growth within the economy.
In February, the Bank announced it was pausing its QE programme – having already injected £200 billion into the economy to bring it out of recession.
The move to hold interest rates comes despite rising inflation. The CPI inflation rate is a benchmark for the Bank of England’s MPC.
Consumer Price Index (CPI) fell to 3.4% in May from a 17-month high of 3.7% in April, according to the latest figures from the Office for National Statistics.
However, inflation remains stubbornly high and at last month’s meeting, policymaker Andrew Sentance voted for rates to rise to 0.75% from their current historic low of 0.5%.
Meanwhile, it was announced this week that Martin Weale will join the MPC in time for the August meeting.
Mr Weale replaces Kate Barker after her term ended on 31 May.
Mr Weale is one of four external members appointed by the Government and for the past decade and a half has been in charge of the National Institute of Economic and Social Research (NIESR) – an influential think tank which provides regular updates on economic trends.
As was the case at the June meeting, the MPC will comprise just eight members instead of the usual nine.
In other news today, the Halifax has reported that house prices fell 0.6% in June compared with May, putting the average cost of a house at £166,023.
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