Bank of England holds interest rates
Published On 10 January 2008
Interest rates will remain unchanged at 5.5 per cent, the Bank of England announced today.The Bank's Monetary Policy Committee (MPC) decided to hold the base rate, resisting calls for a quarter-point cut.
Many retailers will be disappointed by the news after reporting poor Christmas sales figures. The Bank's announcement was nevertheless anticipated by most financial institutions.
Pre-empting the decision, Ross Walker, economist at Royal Bank of Scotland, commented the day before the announcement: "Despite some evidence of a sharper-than-expected deterioration in business and financial services, overall data developments during the past month do not seem sufficient to force an earlier policy response."
Most analysts remain convinced, however, that borrowing rates will be reduced in February.
In response to today's decision, Trevor Williams, chief economist at Lloyds TSB Corporate Markets, said: "Today's decision is likely to have been a close call.
"Next month will be close again, but with the latest inflation report available and assuming data is sufficiently gloomy, we are likely to see that much anticipated interest rate cut."
Rates were last cut in December when the MPC reduced the rate of borrowing from 5.75 per cent to 5.5 per cent.
