Members of the Bank of England’s monetary policy committee (MPC) has voted unanimously to hold interest rates at its latest meeting.
The move follows last month’s decision to raise rates by 0.25 percentage points, the first hike in almost 10 years.
The MPC also voted to keep both corporate and government bond purchases on hold, at £10bn and £435bn respectively.
After figures published yesterday showed inflation had hit 3.1 per cent in November, the MPC has forecast it is close to its peak. However, the minutes of the MPC’s meeting indicated it was unlikely to hike rates again in the forseeable future thanks to “mixed” economic data.
“It’s clear that now is not the time for a further rate rise,” said Nancy Curtin, chief investment officer at Close Brothers Asset Management.
“Even last month’s decision may have been too hasty given the strain the economy is under, and we certainly don’t expect further moves from the MPC in the short-term.
“Employment may still be near a record high, but wage growth continues to lag inflation, which will limit consumer spending. Productivity tops the list of concerns for the Treasury and MPC alike.
“The chancellor’s promise to bridge the productivity gap will go some way to improving supply side issues, but it will not bring the scale of improvement we need. The amount of capital committed to reforming this economic driver is a drop in the ocean compared to the amount committed to issues like the UK’s divorce bill from the EU. The government clearly has little fiscal room to manoeuvre.”
Source: City A.M.