Bank of England Unanimous In Interest Rate Freeze

By Stewart Douglas

The Monetary Policy Committee of the Bank of England were unanimously behind maintaining interest rates at 5.75% last month, according to documents published today.

The minutes of the meeting held towards the beginning of this month held a 9-0 vote in favour of keeping interest rates at the central bank steady at 5.75%.

Interest rates have been raised five times through the course of this year, and analysts had predicted a rise to 6% as an ‘almost certainty’.

However after news of a significant drop in inflation to well within the government’s 2% threshold over last month, analysts have u-turned, predicting no more interest rate rises for the time being.

The minutes of the meeting, published today, indicated that members of the Monetary Policy Committee, responsible for determining monetary policy “had no firm view” as to whether rates would be needed to be increased to keep inflation at bay.

The Bank also noted that the immediate inflation outlook is still ‘cloudy’, with no real certainty as to the future of the economic problem, indicating that the Bank had perhaps intended to wait for inflation figures before casting any further judgement or decision on its next move.

However, with inflation settling at 1.9% according to Tuesday’s figures, analysts are eagerly anticipating the minutes of next month’s meeting in order to establish further the intention of the central bank as regards interest rates in the near future.

Freezing interest rates had the effect of weakening the pound against the dollar and the euro earlier this month, which has been widely received as a positive in the eyes of exporters of goods and services.

Meanwhile, homeowners nationwide will benefit from the freeze in interest rates, with mortgage interest repayments seeming settled in line with 5.75% for the time being.