In an announcement at noon today, the Bank of England quashed rumours that interest rates would rise as the economy recovers from the pandemic.
Interest rates were first brought down to the historic low of 0.1% at the start of the pandemic in March 2020. Analysts had predicted that the Monetary Police Committee (MPC) would today vote for a rate rise to 0.25% in line with inflation.
The members of the MPC voted 7-2 in favour of maintaining the rate, with the governor of the Bank of England Andrew Bailey being amongst those voting in favour.
The Bank Of England announces interests rates will stay low at 0.1%.
The MPC’s decision came as a shock to financial markets, but it is still expected that interest rates will reach 1% by the end of 2022.
The Bank forecasts that inflation is set to continue to soar in the coming months, and is expected to reach 5% by spring 2022. To keep to its mandate of maintaining inflation at 2%, governor Bailey has admitted that the Bank “will have to act”.
The announcement saw the value of pound sterling fall by nearly 1% against the dollar.
The MPC hinted an interest rate rise could come when it next convenes in December.
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HeadlineBank of England maintains interest rates at 0.1%
Short HeadlineInterest rates set to stay at 0.1%
StandfirstThe Monetary Police Committee voted in favour of maintaining interest rates after they were expected to rise to combat inflation.
In an announcement at noon today, the Bank of England quashed rumours that interest rates would rise as the economy recovers from the pandemic.
Interest rates were first brought down to the historic low of 0.1% at the start of the pandemic in March 2020. Analysts had predicted that the Monetary Police Committee (MPC) would today vote for a rate rise to 0.25% in line with inflation.
The members of the MPC voted 7-2 in favour of maintaining the rate, with the governor of the Bank of England Andrew Bailey being amongst those voting in favour.
The Bank Of England announces interests rates will stay low at 0.1%.
The MPC’s decision came as a shock to financial markets, but it is still expected that interest rates will reach 1% by the end of 2022.
The Bank forecasts that inflation is set to continue to soar in the coming months, and is expected to reach 5% by spring 2022. To keep to its mandate of maintaining inflation at 2%, governor Bailey has admitted that the Bank “will have to act”.
The announcement saw the value of pound sterling fall by nearly 1% against the dollar.
The MPC hinted an interest rate rise could come when it next convenes in December.
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