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08/05/2003
Bank of England holds interest rates at 3.75%
The Monetary Policy Committee of the Bank of England has announced its decision to keep interest rates in the UK at 3.75%.
The decision by the MPC to hold rates comes in spite of concerns about the increasingly weakened state of the UK economy, particularly the in manufacturing sector.
Though sterling improved slightly on the decision, the pound has hit its lowest level against the euro since the launch of the Eurozone currency.
The decision to hold rates was being billed as a close call. While sterling is weaker, this in turn promotes inflationary pressures within the economy.
However, expectations that there would be a further cut in rates by the MPC was tempered by the latest batch of economic forecasts, the drafts of which are in the hands of the committee.
Economic growth that slowed dramatically in Q1 of 2003 to 0.2% and has confounded expectations of a better performance in the wider UK economy.
Recent reports from the previously buoyant housing market indicate that this market too has slowed, and downbeat surveys gleaned from both the business and the consumer sector have caused concern among analysts.
The consumer sector, which had been supporting the economy, has not yet seen the full impact of the rise in National Insurance, and the CBI recently warned of huge jobs losses if the wider economy could not be kick started back towards improved growth.
(SP)
The decision by the MPC to hold rates comes in spite of concerns about the increasingly weakened state of the UK economy, particularly the in manufacturing sector.
Though sterling improved slightly on the decision, the pound has hit its lowest level against the euro since the launch of the Eurozone currency.
The decision to hold rates was being billed as a close call. While sterling is weaker, this in turn promotes inflationary pressures within the economy.
However, expectations that there would be a further cut in rates by the MPC was tempered by the latest batch of economic forecasts, the drafts of which are in the hands of the committee.
Economic growth that slowed dramatically in Q1 of 2003 to 0.2% and has confounded expectations of a better performance in the wider UK economy.
Recent reports from the previously buoyant housing market indicate that this market too has slowed, and downbeat surveys gleaned from both the business and the consumer sector have caused concern among analysts.
The consumer sector, which had been supporting the economy, has not yet seen the full impact of the rise in National Insurance, and the CBI recently warned of huge jobs losses if the wider economy could not be kick started back towards improved growth.
(SP)
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Interest rates rest at 4.5%
The Bank of England has kept interest rates at 4.5% for the fourth month in succession. The Bank’s Monetary Policy Committee (MPC) reflects the recent rise in inflation and anxiety over retail sales in the run up to Christmas. Last month inflation was forecast to remain above the government's 2% target, mainly due to rising oil prices.
Interest rates rest at 4.5%
The Bank of England has kept interest rates at 4.5% for the fourth month in succession. The Bank’s Monetary Policy Committee (MPC) reflects the recent rise in inflation and anxiety over retail sales in the run up to Christmas. Last month inflation was forecast to remain above the government's 2% target, mainly due to rising oil prices.
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