BoE keeps interest rates static
- Published: 03/08/2007
The Bank of England's Monetary Policy Committee (MPC) has announced that it has voted to maintain interest rates at 5.75 per cent.
Borrowers in the UK have been subjected to a series of rate increases in the last few months - with interest rates having stayed steady at 4.5 per cent over the year up to August 2006.
Analysts say that the decision to maintain interest rates at 5.75 per cent was inevitable given current economic conditions.
"Further rate hikes are, in our view, unnecessary as the economy starts to slow and inflation falls to 2 per cent over the next few months," Sebastian Mackay, senior economist at Scottish Widows Investment Partnership (SWIP), commented.
"The risk still remains that the hawks on the committee could persuade the swing voters to vote for an increase to six per cent in September. However, recent market volatility will certainly impact any decision and if the market continues to struggle, even the most hawkish members of the MPC might find it difficult to justify a further rate rise," he added.
Borrowers in the UK have been subjected to a series of rate increases in the last few months - with interest rates having stayed steady at 4.5 per cent over the year up to August 2006.
Analysts say that the decision to maintain interest rates at 5.75 per cent was inevitable given current economic conditions.
"Further rate hikes are, in our view, unnecessary as the economy starts to slow and inflation falls to 2 per cent over the next few months," Sebastian Mackay, senior economist at Scottish Widows Investment Partnership (SWIP), commented.
"The risk still remains that the hawks on the committee could persuade the swing voters to vote for an increase to six per cent in September. However, recent market volatility will certainly impact any decision and if the market continues to struggle, even the most hawkish members of the MPC might find it difficult to justify a further rate rise," he added.