Menu
06/10/2005
Bank of England leaves interest rates on hold
The Bank of England has left UK interest rates on hold at 4.5% for the second month running.
The Bank’s Monetary Policy Committee had reduced interest rates from 4.75% in August, in an attempt to reverse a slump in consumer spending.
However, retail sales volumes fell at their fastest pace for 22 years last month.
Rising inflation, mainly due to oil price increases, is likely to deter the MPC from reducing interest rates any further in the short-term. Inflation rose to 2.4% in August, 0.4% higher than Chancellor Gordon Brown’s target of 2%.
However, some analysts remain hopeful that a further rate cut may be announced in November.
David Frost, Director General of the British Chambers of Commerce, said that Thursday’s decision had been expected. He said: “Given the immediate uncertainties, we were not surprised that that the committee has decided to take time to assess the economic circumstances, before taking action. However, it is critically important that the MPC should maintain a flexible approach, and should stand ready to counter the sharp slowdown in the pace of economic activity.
"Year-on-year GDP growth has been revised down to 1.5%, which is a 12-year low. Higher oil prices mean inflation has increased to above 2%. Unemployment has risen in each of the last seven months. The housing market weakening will continue to dampen consumer spending.
"With UK GDP growth firmly below trend, there is a clear risk that unemployment will rise further. Against this background, we believe that a further cut in interest rates may be needed later in the year. The MPC must signal clearly that if economic circumstances continue to worsen, they will not hesitate to act resolutely."
Kevin Hawkins, Director General of the British Retail Consortium, said: "The BRC is disappointed the MPC did not make a further reduction to interest rates today. The weak consumer sentiment does not appear to be subsiding and so the MPC's decision does not reflect the reality on the high street. One reduction, while welcome, will still take some months to work through to the consumer and have any effect. A further cut between now and Christmas is necessary if we are to see any positive change in the retail climate."
(KMcA)
The Bank’s Monetary Policy Committee had reduced interest rates from 4.75% in August, in an attempt to reverse a slump in consumer spending.
However, retail sales volumes fell at their fastest pace for 22 years last month.
Rising inflation, mainly due to oil price increases, is likely to deter the MPC from reducing interest rates any further in the short-term. Inflation rose to 2.4% in August, 0.4% higher than Chancellor Gordon Brown’s target of 2%.
However, some analysts remain hopeful that a further rate cut may be announced in November.
David Frost, Director General of the British Chambers of Commerce, said that Thursday’s decision had been expected. He said: “Given the immediate uncertainties, we were not surprised that that the committee has decided to take time to assess the economic circumstances, before taking action. However, it is critically important that the MPC should maintain a flexible approach, and should stand ready to counter the sharp slowdown in the pace of economic activity.
"Year-on-year GDP growth has been revised down to 1.5%, which is a 12-year low. Higher oil prices mean inflation has increased to above 2%. Unemployment has risen in each of the last seven months. The housing market weakening will continue to dampen consumer spending.
"With UK GDP growth firmly below trend, there is a clear risk that unemployment will rise further. Against this background, we believe that a further cut in interest rates may be needed later in the year. The MPC must signal clearly that if economic circumstances continue to worsen, they will not hesitate to act resolutely."
Kevin Hawkins, Director General of the British Retail Consortium, said: "The BRC is disappointed the MPC did not make a further reduction to interest rates today. The weak consumer sentiment does not appear to be subsiding and so the MPC's decision does not reflect the reality on the high street. One reduction, while welcome, will still take some months to work through to the consumer and have any effect. A further cut between now and Christmas is necessary if we are to see any positive change in the retail climate."
(KMcA)
Related UK National News Stories
Click here for the latest headlines.
09 June 2005
Interest rates remain at 4.75%
The Monetary Policy Committee for the Bank of England has left UK interest rates unchanged for the tenth month in a row. The decision to keep the interest rate at running, at 4.75% follows further uncertainty in the economy. Figures published today revealed that while there was slight monthly increase, 0.
Interest rates remain at 4.75%
The Monetary Policy Committee for the Bank of England has left UK interest rates unchanged for the tenth month in a row. The decision to keep the interest rate at running, at 4.75% follows further uncertainty in the economy. Figures published today revealed that while there was slight monthly increase, 0.
08 September 2005
Interest rates remain on hold at 4.5%
The Bank of England has left interest rates unchanged at 4.5%, as expected by many analysts. Last month, the Bank’s Monetary Policy Committee (MPC) reduced interest rates from 4.75% to 4.5%, amid fears of a slowdown in economic growth and a slump in consumer spending.
Interest rates remain on hold at 4.5%
The Bank of England has left interest rates unchanged at 4.5%, as expected by many analysts. Last month, the Bank’s Monetary Policy Committee (MPC) reduced interest rates from 4.75% to 4.5%, amid fears of a slowdown in economic growth and a slump in consumer spending.
08 March 2007
Interest rates remain unchanged at 5.25%
UK interest rates have been left on hold at 5.25% this month by the Bank of England's Monetary Policy Committee (MPC). The MPC raised the interest rate by 0.25% in January. This followed three other quarter rate rises since last August. Inflation recently rose to 3%, well above the government's target of 2%.
Interest rates remain unchanged at 5.25%
UK interest rates have been left on hold at 5.25% this month by the Bank of England's Monetary Policy Committee (MPC). The MPC raised the interest rate by 0.25% in January. This followed three other quarter rate rises since last August. Inflation recently rose to 3%, well above the government's target of 2%.
08 February 2007
No change for UK interest rates
The Bank of England has voted to leave the interest rate unchanged at 5.25% this month. The news will come as a relief to homeowners, following last month's surprise 0.25% increase. The Bank's Monetary Police Committee increased the rate in January in an attempt to curb inflation, which hit 3% in December.
No change for UK interest rates
The Bank of England has voted to leave the interest rate unchanged at 5.25% this month. The news will come as a relief to homeowners, following last month's surprise 0.25% increase. The Bank's Monetary Police Committee increased the rate in January in an attempt to curb inflation, which hit 3% in December.
04 September 2003
Interest rates stick at 3.5%
The Bank of England’s Monetary Policy Committee has announced that the UK interest rate will be held at 3.5%. Many leading economists consider that the interest rate may have reached its lowest point, particularly as there are early signs of an economic recovery.
Interest rates stick at 3.5%
The Bank of England’s Monetary Policy Committee has announced that the UK interest rate will be held at 3.5%. Many leading economists consider that the interest rate may have reached its lowest point, particularly as there are early signs of an economic recovery.
-
Northern Ireland WeatherThis Evening and Tonight:A fine end to the day with some sunshine, then clear spells overnight. Low cloud could form around some Irish Sea coasts later in the night, or a few fog patches in prone spots.. Minimum temperature 9 °C.
