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BOE leave rates unchanged at 0.5pct......
inspector_monkfish
Posts: 9,276 Forumite
....as expected
12:00 10Feb11 - BANK OF ENGLAND MAINTAINS BANK RATE AT 0.5 PCT
12:00 10Feb11 - BoE keeps rates steady despite inflation risk
LONDON, Feb 10 - The Bank of England kept its key interest rate at a record low of 0.5 percent on Thursday, judging that the threat from rising inflation will prove temporary and that Britain's recovery remains in doubt.
Shock data last month showed Britain's economy went into reverse at the end of last year, and headwinds from tax rises and public spending cuts look set to persist for some time.
Economists had been unanimous in predicting a steady rate outcome but money markets had priced in around a 20 percent chance that rates would rise to 0.75 percent.
The BoE's decision to hold fire will come as a relief to the government which is hoping loose monetary policy will cushion the blow from its fiscal tightening.
However, it will also heighten criticism that Britain's central bank is ignoring its price stability mandate. Inflation has been more than a percentage point above its 2 percent target for the past year and looks set to shoot even higher as the recent jump in oil and commodity prices feeds through.
BoE Governor Mervyn King warned last month that inflation could rise as high as 5 percent in the coming months. But he reiterated his view that it would be back on target by early next year, due to slack in the economy and the absence of further inflationary shocks like last month's rise in sales tax.
Two other members of the BoE's monetary policy committee disagreed with that view and voted for an immediate quarter-point interest rate rise in January.
A breakdown of this month's vote will not be published until Feb. 23.
12:00 10Feb11 - BANK OF ENGLAND MAINTAINS BANK RATE AT 0.5 PCT
12:00 10Feb11 - BoE keeps rates steady despite inflation risk
LONDON, Feb 10 - The Bank of England kept its key interest rate at a record low of 0.5 percent on Thursday, judging that the threat from rising inflation will prove temporary and that Britain's recovery remains in doubt.
Shock data last month showed Britain's economy went into reverse at the end of last year, and headwinds from tax rises and public spending cuts look set to persist for some time.
Economists had been unanimous in predicting a steady rate outcome but money markets had priced in around a 20 percent chance that rates would rise to 0.75 percent.
The BoE's decision to hold fire will come as a relief to the government which is hoping loose monetary policy will cushion the blow from its fiscal tightening.
However, it will also heighten criticism that Britain's central bank is ignoring its price stability mandate. Inflation has been more than a percentage point above its 2 percent target for the past year and looks set to shoot even higher as the recent jump in oil and commodity prices feeds through.
BoE Governor Mervyn King warned last month that inflation could rise as high as 5 percent in the coming months. But he reiterated his view that it would be back on target by early next year, due to slack in the economy and the absence of further inflationary shocks like last month's rise in sales tax.
Two other members of the BoE's monetary policy committee disagreed with that view and voted for an immediate quarter-point interest rate rise in January.
A breakdown of this month's vote will not be published until Feb. 23.
Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)
(MSE Andrea says ok!)
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Comments
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Have they sack the bloke voting for the rise a few months back though?Not Again0
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no minutes until 23rd feb.. lets hope so,0
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1984ReturnsForReal wrote: »Have they sack the bloke voting for the rise a few months back though?
2 voted for a rise last time around and one for more QE.0 -
rates don't rise - what a shocker!!!
even when rates rise they'll be the usual comments by the usual suspects - they don't understand why rates are being kept low and won't be going over 2%/3% for at least 18 months/2 years.0 -
There will be many people saying "thankyou thankyou thankyou" right now.
I've just witnessed one, and it wasn't me!
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Was it your subconscious?
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Graham_Devon wrote: »There will be many people saying "thankyou thankyou thankyou" right now.
I've just witnessed one, and it wasn't me!
Bloke next to me did it, not because he's struggling, but because he pays less than £200 a month now.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
a lovely tangent you've put in there but reading the report is easy - understanding why rates are low is another subject completely.Thrugelmir wrote: »Reading the full published BOE minutes is very informative.0 -
Bloke next to me did it, not because he's struggling, but because he pays less than £200 a month now.
It would be interesting how much inflation has eaten into your;) £200 over the months, also how much it's going go eat into it in the future.
The over indebted breathe a sigh of relief for another month.Have owned outright since Sept 2009, however I'm of the firm belief that high prices are a cancer on society, they have sucked money out of the economy, handing it to banks who've squandered it.0
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