6th August 2015
The Bank of England’s Monetary Policy Committee (MPC) has held interest rates at their historic low of 0.5% for another month.
The Committee also kept its bond-buying programme at £375bn.
Today – dubbed ‘Super Thursday’ – sees three releases from the Bank. It is the first time the MPC announced the minutes of its two day meeting at the same time as it declares what it is doing with interest rates. The Bank will also unveil its Inflation Report, widely viewed as the quarterly health check on the economy.
It emerged that MPC members voted 8-1 to keep rates on hold, with only one member Ian McCafferty voting to raise rates.
The cost of borrowing has now been held at 0.5% for more than six years after the MPC cut rate interest rates in March 2009 during the financial crisis in a bid to prop-up the economy.
Commenting on the MPC minutes, Robert Gardener, co-chief executive of Redington said: “After today’s 8:1 decision against an interest rate rise, the MPC looks more dovish than expected.”
Susan Hannums, director at Specialist Savings Adviser Savingschampion.co.uk said: “It looks like 2016 will see an end to record low interest rates and one of the toughest times in living memory for savers. There is a generation of young savers who have never experienced an interest rate rise and only known shockingly low rates on their deposits. At the other end of the scale pensioners who have relied on their savings income will no doubt be breathing a sigh of relief that better rates look set to come.”
Maike Currie, associate investment director at Fidelity Worldwide Investment added: “The tide may be turning on the era of ultra-low interest rates, albeit it very slowly. While the Bank of England will keep interest rates at 0.5% for now, monetary policy committee minutes show one MPC member, Ian McCafferty, voting in favour of an interest rate hike. Could this prompt others to follow his lead in coming months?”