Bank of England holds cost of borrowing at 4.5%

The Bank of England’s Monetary Policy Committee has announced that it will once again be leaving the base rate of interest unchanged at 4.5 per cent.

The decision has come as little to surprise with every economist predicting the rate would be held. Analysts Global Insight described it as a “nailed on certainty”.

The interest rate has been held at 4.5 per cent since last August, when the bank reduced it a quarter point to stimulate growth.

Analysts are now predicting a further rate cut in May at the earliest, with August a more widely accepted date.

“We believe that the Bank of England could yet cut interest rates in May, although a move in the third-quarter is increasingly looking more likely,” said Howard Archer of Global Insight.

There has been growing pressure both inside and outside the committee to reduce the interest rate to stimulate flagging consumer spending through cut price best rate credit.

Committee member Steve Nickell is known to have voted for a 0.25 per cent cut for the past three months and other members are believed to have joined him today.

© Adfero Ltd

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