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Wednesday 29th May 2024, 2:00 PM (BST)

Bank of England votes to hold rates at 0.5%

Bank of England votes to hold rates at 0.5%

The nine member Bank of England panel that decides the interest rate have voted to leave it unchanged at 0.5%.

The members of the Monetary Policy Committee (MPC) voted 8-1 to keep things as they were and also predicted that inflation in the UK would remain below 1% until the second half of 2016.

Subdued inflation

The minutes of the meeting showed that continuing subdued inflation was the main focus of attention for the policy makers.

The Consumer Prices Index (CPI) in October was -0.1% and the committee felt that it would change to become slightly positive for November.

The only member to vote for a rate rise was Ian McCafferty, one of four external members on the panel. He had voted for a quarter-point rise at all of the previous four MPC meetings.

The latest vote sees the historic low left unchanged for 81 meetings of the committee in a row.

On-going reluctance

Chief economist at Markit, Chris Williamson, said: "The ongoing reluctance to tighten policy contrasts with the more hawkish stance of US policymakers,"

"Policymakers in the US... faced with an economy growing at a similar rate to the UK, as well as a similar level of unemployment and inflation and even lower wage growth, are sending a clear message that now's the time to start the process of normalising policy," he added.

Following the announcement, Sterling fell slightly against both the dollar and euro.


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