United Kingdom: BoE keeps Bank rate at 0.50%
December 18, 2013
At its 4-5 December meeting, the Bank of England (BoE) decided to keep the Bank Rate unchanged at 0.50% and to leave the stock of asset purchasing at €375 billion. Both decisions, which the Monetary Policy Committee (MPC) made unanimously, were in line with market expectations.
According to the Bank, the latest economic data show that the recovery, "was being driven by consumption and stockbuilding, with both investment and net trade weaker than expected." As a result, sustained economic growth would imply an improvement in investment as well as a rebalancing of domestic and external demand. The Bank added that inflation pressures have moderated and thus, the index is expected to, "remain close to the 2.0% target."
All of the FocusEconomics Consensus Forecast panelists expect the BoE to leave interest rates unchanged at 0.50% this year. For next year, the majority of panelists expect the BoE to stay put, resulting in a year-end projection of 0.54%.
Author: Dirina Mançellari, Senior Economist