Once more the UK base interest rate has been left at its 0.5 per cent level for another month. The Monetary Policy Committee of the Bank of England has chosen to keep the rates at their current historically low level.
The base rate was set at its current level in March of 2009. Several financiers use the base rate when calculating rates for their financial offerings such as fixed-rate bonds and ISAs.
The BoE also elected to hold off on their quantitative easing efforts for the month of December. The scheme is designed to stimulate economic growth by injecting more cash into the marketplace.
The BoE will most likely leave QE alone for the immediate future, say industry experts. This is due to both a rise in manufacturing activity and third quarter economic growth that was better than expected. Despite these positive steps, one policymaker argued last month for the addition of £50 billion to the economy in order to facilitate recovery efforts.
Another policymaker has continued his resistance to the low interest rate. Andrew Sentance has consistently voted throughout the last six monthly meetings for a raise in interest rates in an effort to curb the high inflation rate affecting the UK currently.
Mr Sentance is predicted to vote for an interest rate hike once more. The official meeting minutes, complete with voting records of MPC members, will not be released until the 22nd of December.
The Consumer Prices Index, which measures the rising cost of household goods in the UK, has been holding steady at 3.1 per cent for several months. This is considerably above the government’s 2.0 per cent target rate.
Industry experts are of the belief that interest rates will remain flat for the immediate future. The government’s quantitative easing scheme is expected to be put back into place in the coming year if the economic recovery becomes stagnant.