Thursday, May 5, 2011

No change to UK base rate

UK interest rates kept on hold at 0.5%

UK interest rates have been kept at the record low of 0.5% again by the Bank of England's Monetary Policy Committee. Data this week pointed to a slowdown in growth in manufacturing, construction and services, which economists took as a sign that the Bank would not change rates with the recovery still weak. This is despite the fact that inflation is currently at 4%, double the Bank's target rate. The MPC did not reveal any new quantitative easing measures either.

Posted by jack c @ 12:08 PM (1720 views)
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2 thoughts on “No change to UK base rate

  • mark wadsworth says:

    Well that’s me told. I expected Halifax to bring out their April report this morning to pile the pressure on. Ah well.

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  • The Telegraph article Bank of England Governor Mervyn King warns on interest rate rise quotes King:

    “The economic consequences of high-level indebtedness now would become more severe if rates were to rise. It is the main reason why interest rates are so low.”

    That’s bad enough but the next paragraph is equally revealing:

    He added it would take a number of years to repair the damage across Europe caused by the financial crisis. “The economic challenges will last for many years…The financial crisis is far from over”

    Long term forecasts are hazardous, as readers of the blog over the last few years should know but judging by King’s comments it seems to me that the BoE are likely to keep IRs low for a long time now.

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