The central bank of the U.K. has voted to maintain interest rates at the record low level that has been maintained for over two years as the economy continues to struggle to gain momentum, according to The Daily Telegraph. On Thursday, the Bank of England said that its Monetary Policy Committee voted to keep the bank’s benchmark interest rate at 0.5%, which is the 27th month at the level. The decision comes despite persistently high inflation, and Howard Archer of IHS Global Insight said the committee members appear “prepared to hold fire on interest rates to give the economy more of a change to develop forward momentum.”
Inflation has been projected by the BOE to reach as high as 5% this year, although the latest data have shown that economic growth was slow in the first three months of the year and that households are facing mounting pressure form public spending cuts and falling real wages. According to The Wall Street Journal, a separate report from the Office for National Statistics found that the U.K.’s trade deficit with the rest of the world dropped to £7.4 billion in April from £7.7 billion the previous month. The data suggest that exports will not contribute as strong in the second quarter as they did to growth in the first three months of the year.
Click here to read the story on the BOE decision from The Daily Telegraph.
Click here for coverage of the trade deficit from The Wall Street Journal.