Bank of England Rates Unchanged

Bank of England Rates Unchanged.

The Bank of England Monetary Policy Committee (MPC) has again held interest rates at 0.5%pa.

In addition, its quantitative easing programme has also remained frozen.

This follows the European Central Bank also holding interest rates but confirming that it is to inject more capital into Europe to stave off the threat of contracting economies and a return to recession.

Comment

There is a real threat at present of Europe going into reverse. Given that Europe is the UK’s biggest trading partner, it seems logical that the UK has deferred any rate rises given global instability in addition to European concerns of slowdown, there are of course worries for Iraq and oil, Russian sanctions hurting Europe over the Ukraine. Markets are nervous for oil prices, we have seen markets fall dramatically this week and we expect some heavy falls in Japan and then across the US and UK.

Many were predicting an early interest rate rise, we still see the end of the year as probably the earliest and more likely in the New Year for a rate rise.