Interest rates remain at record low
The Bank of England’s Monetary Policy Committee (MPC) have yet again voted to keep interest rates at 0.5%.
It is now 25 months since rates were first set at this record level, but despite the fact that inflation is set at more than twice the Banks 2% target rate, the rate setting committee have made the decision to leave things as they are. No new quantitative easing measures were unveiled either.
Yesterday respected economic think tank – The National Institute of Economic and Social Research (NIESR) estimated growth of 0.7% in the first three months of the year, but this forecast has to be taken in the context of the negative growth in the last quarter of 2010. Some members of the MPC have been quoted as saying they would like to see confirmation of growth in the first quarter before committing to a rise, so we will have to wait until the official Office for National Statistic figure comes out later this month
Meanwhile, there are signals from a variety of consumer-facing businesses that households are really finding things tough and consumer spending is likely to slow.
In March, three MPC members voted for a rise, but we won’t find out until Wednesday 20th April how many were in favour this month.
