The U.K. central bank has decided to leave monetary policy unchanged at the latest meeting despite ongoing above-target inflation and an uneven economic recovery, according to The Daily Telegraph. On Thursday, the Bank of England announced that the Monetary Policy Committee voted to keep its benchmark interest rate at a record low of 0.5% despite mounting pressure from rising inflation, marking the completion of two years of ultra-loose monetary policy. Policymakers also voted to keep its quantitative easing program unchanged at £200 billion.
The decision to leave the interest rate unchanged is contentious, and Howard Archer of IHS Global Insight said the vote “likely followed an intense, heated debate and well could have been the result of a very close vote.” A poll of 49 economists found three-quarters of respondents expecting an increase in interest rates before the end of the year, with the median forecast for a date falling on the November meeting of the MPC. Andrew Goodwin of Ernst & Young’s ITEM Club said in the face of government spending cuts, “securing economic growth is more important than curbing inflation.” Consumer price inflation was measured at 3.7% in December, which is nearly double the 2% target set by the central bank.
Click here to read the story on the BOE meeting from The Daily Telelgraph.
Click here for coverage of economists’ expectations from The Daily Telegraph.