The Bank of England’s Monetary Policy Committee (MPC) has once again voted 8-1 to maintain the Bank Rate at 0.5%.
Ian McCafferty was again the single dissenter.
The MPC voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves – so-called quantitative easing – at £375 billion.
The Bank Rate has been at 0.5% since March 2009, 80 months ago.
The bank also signalled there was no imminent rise in the Bank Rate.
The central bank’s quarterly inflation outlook said: “inflation is likely to remain lower than previously expected until late 2017” and not return to the official government target of 2% in around two years’ time.
“All members agree that, given the likely persistence of the headwinds weighing on the economy, when Bank rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles. This guidance is an expectation, not a promise,” the report said.
Barry Naisbitt, chief economist at Santander: “It was no surprise that the Monetary Policy Committee (MPC) once again decided to hold the Bank Rate at 0.5% today. With inflation just slightly negative in September and uncertainties about global economic prospects having been a feature of the last few months, the MPC was unlikely to change the decision taken last month.
“While the positive news from the activity indicators reported this week hints that the slowing in quarterly GDP growth seen in the third quarter – to 0.5% from 0.7% in the second quarter – might reverse, inflation remains well below the 2% target rate. This month the Inflation Report probably takes centre stage and it provides the Bank of England with an opportunity to set out the extent to which it sees any changes to the prospects for UK growth and inflation and also the global and domestic uncertainties that the economy faces.”
