UK interest rates held at 0.5 per cent

The Bank of England today voted to maintain interest rates at 0.5 per cent.

Barry Naisbitt, Chief Economist at Santander UK, commented: "The surprise news last month was that a third Monetary Policy Committee (MPC) member voted to raise rates.  This, combined with concerns that inflation is going to increase further, made the March MPC decision more of a cliff-hanger for commentators than for a long time.  While the MPC again voted for no change in Bank Rate today, it is again likely to have been a split vote and the decision on whether to raise rates or not hinges on how the economic data appears in the coming months.  Given the projections in the Inflation Report, markets are now expecting an increase in rates in the next few months unless the economic data shows weak activity.  We'll know the voting outcome and the views behind it in a couple of weeks when the minutes are published and this may give a clearer guide.”