LONDON, March 10: The Bank of England (BoE) left its key interest rate unchanged at 4.75 per cent for the seventh month in a row on Thursday, amid mixed signals about the strength of Britain’s economy.
The bank’s rate-setting monetary policy committee (MPC) has raised the cost of borrowing by a quarter of a point five times since November 2003 as it sought to vent excessive heat from the economy.
The rates freeze was in line with market expectations as a general economic easing, alongside subdued inflation data, have combined to keep interest rates on hold since last August.
Signs of slower consumer spending and a stabilizing housing market would likely have sealed the decision not to raise rates ahead of a general election, widely expected in early May.
As is customary when no change is made to the “repo” rate — the rate of interest at which the BoE lends to commercial banks — the central bank gave no explanation for the decision following its two-day regular monthly meeting.
“Even in the absence of a statement, it is pretty clear why rates remained unchanged. The evidence accumulated since the MPC last met was sufficiently ambiguous,” said CALYON economist Daragh Maher.
To gain an insight into policymakers’ thinking however, markets will have to wait until March 23 for the minutes of the two-day meeting.—AFP
