The U.K. central bank voted to keep interest rates at a record low for the 25th month in a row as had been widely anticipated even as inflationary pressures continue to mount, according to The Daily Telegraph. On Thursday, the Bank of England’s Monetary Policy Committee decided to maintain the benchmark interest rate at the record low level of 0.5%, marking the longest period of no change since 1950. Economists are forecasting for the first interest rate increase of 0.25% in May.
At the previous meeting, three members of the MPC voted to increase the benchmark rate with inflation currently sitting at 4%, which is double the target set by the central bank. Howard Archer of IHS Global Insight called policymakers’ position “hugely difficult,” highlighting “rising consumer price inflation on one side and relatively fragile economic activity and serious growth headwinds on the other.” Economists and business groups have raised concerns that the recovery is too weak to support fiscal tightening ahead of government austerity cuts.
Click here to read the story from The Daily Telegraph.
Click here for coverage of economists’ reactions from The Daily Telegraph.