MPC opts for hold

10-Jan-2008

The Bank of England's monetary policy committee (MPC) has voted to leave interest rates on hold at 5.5 per cent.

The move was widely anticipated by analysts, but it is likely that the decision was a close one with pressure for another cut.

Last month, the MPC reduced interest rates by 0.25 per cent and with the economy slowing the downward trend looks set to continue.

But with concerns about inflation also present, the MPC has decided to wait and see for another month at least.

Ahead of the decision, economists were predicting a hold this month, but most expected to see a reduction before the end of the quarter.

Simon Hayes, of Barclays Capital, went as far as to predict that the base rate could be as low as 4.75 per cent come April.

Such a move would be good news for first-time buyers, who face a tough battle to get on the property ladder with house prices still out of reach for many.


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