Bank of England Split On Interest Rates

Published / Last Updated on 16/06/2017

Bank Of England Split On Interest Rates.

The Bank of England Monetary Policy Committee has today voted by a majority of 5:3 to keep interest rates at 0.25%pa.

Given inflation going up again in May to 2.7% pa, as confirmed by the Office for National Statistics, pressure is mounting to increase interest rates.

The surprise is that for many months, the majority to keep interest rates has been 7:1 and the swing on policy committee member sentiment.

The news of this strengthened the £ driving FTSE 100 stocks down.  They earn much of their profit overseas meaning that when those profits are converted back to a weak sterling, profits are higher.

Comment.

We expect interest rates to rise soon.  Pressure is on the Bank of England to control inflation and strengthen the £.  Pressure is on the Government as benefit increases due in April 2018 such as State Pension increases are linked to the inflation figure in September.  Will we see interest rates increase sooner rather than later?

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