UK interest rates remain on hold at 0.5%

The Bank of England's Monetary Policy Committee has voted to hold interest rates at 0.5% for the 19th consecutive month.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009.
 
Barry Naisbitt, Chief Economist at Santander UK, said: "As expected, once again there was no change from the Monetary Policy Committee (MPC) on rates today.  When they are published, the minutes of the meeting could, however, be rather more interesting than the headline decision.  One MPC member has been voting to raise rates and a recent speech by another member suggested, in effect, the opposite view by discussing the need for more quantitative easing (QE).  As ever, the key to this month's decision will have been how the MPC judged the prospects for inflation and the economy generally.

"With Bank Rate having now been held at a record low of 0.50% for a year and a half, after such an unusually long period of unchanged rates, speculation about the likelihood of a change has started.  Inflation is still above the 2% target, holding at 3.1% in August, and recent figures indicate that the surprisingly strong GDP growth of 1.2% in the second quarter has not been maintained.  With some concerns about a weakening of growth ahead, the MPC still has its foot hard down on the accelerator pedal.  The November Inflation Report is likely to give us a better indication of whether it is likely to ease back a little or if it is more likely that it will press down even harder."