Interest Rates Held Again

Interest Rates Held Again.

The Bank of England Monetary Policy (MPC) met again today and confirmed that:

1. Interest rates are being held at 0.5% pa for the 71^st month, it will 6 years next month, if things remain unchanged
2. The Quantitative Easing Programme (QE) was also frozen at £375bn, in short no more money being pumped into the economy.

Despite a global slowdown and despite Europe, via the European Central Bank setting a precedent, that they said they would never do, of confirming €60bn of QE every month until 2016, the UK held firm.

Comment

The UK inflation rate has fallen off the back off low oil prices, but these have crept up slightly this week.  We are guessing that the MPC will wait to see the effect of QE in Europe, and if that starts to benefit trade with the UK when/if European activity picks, then there will be no further need of QE in the UK and we may well expect interest rate increases say in the summer.  Who knows though?  Much can happen in 2015.  Expect another rock ride.

But rocky rides present ‘buy and sell’ investment opportunities for clients and investors and alike.