Interest rate stays at 5.75 per cent
Published On 6 September 2007
The Bank of England's Monetary Policy Committee (MPC) voted today (September 6th) to keep interest rates at 5.75 per cent.According to the MPC, the decision was partly based on the fact that consumer price index inflation (CPI) fell back to 1.9 per cent in July and is forecast to remain below two per cent for the coming months.
It added that there were "tentative" signs that consumer spending could be slowing as a result of previous interest rate increases.
A statement from the MPC added: "It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households.
"As stated in its August Report, the MPC is monitoring closely the evolution of both credit spreads and the quantities of credit extended, alongside all other data relevant to the outlook for inflation."
Commenting on the Bank's decision, Simon Rubinsohn of the Royal Institution of Chartered Surveyors said: "The decision of the MPC to leave policy on hold today was wholly predictable given the turmoil gripping financial markets.
"The housing market, which has continued to display considerable resilience over the past month, is particularly at risk as the diminished access to finance from non-prime borrowers begins to impact on the level of mortgages approved."
