Interest Rates Frozen Surprise

Interest Rates Frozen Surprise.

The Bank of England’s Monetary Policy Committee (MPC) has again today decided to keep interest rates at 0.5%pa.

The MPC voted with an 8:1 majority to leave interest rates as they are and to maintain the current quantitative easing programme.

Many commentators were predicting an interest rate reduction this week and even a number of banks and building societies have reduced their mortgage lending rates, jumping the gun by expecting a rate reduction.

We have suggested already this week that it may be a little too early to reduce interest rates given that it is only this week that the new Prime Minister, Theresa May, has performed her new cabinet and no negotiations have started yet with regard to the United Kingdom leaving the European Union. In short it is business as usual but we do expect a rate reduction over the next couple of months.