All nine members of the Bank of England’s Monetary Policy Committee (MPC) voted to keep the base rate at 0.5 per cent, it has been stated.
The minutes of the meeting earlier this month showed there was unanimity both on this issue and the level of quantitative easing, which is to remain at £200 billion.
Discussing interest rates – which could impact on those with debt management issues – the body concluded that it was highly uncertain how much inflation would rise in the new year after the VAT rate is restored to 17.5 per cent.
However, the committee said the medium and long-term outlook has not changed since last month’s quarterly inflation report, which suggested the consumer prices index level will not exceed three per cent.
Earlier this week, UK economist at BNP Paribas Alan Clarke said the weakness of the UK economy will lead to the base rate staying on hold throughout 2010.
He added that this is likely to be the case for the duration of 2011 as well.