5 Jun

Base rate cut has to wait as MPC votes to hold

Base rate cut has to wait as MPC votes to hold

Interest rates have held steady at 5 per cent as the Bank of England today resisted pressure for another cut, although many economists expect another cut soon.

The monetary policy committee (MPC) held firm again leaving rates unchanged since April's 0.25 per cent trim.

That decision marked the third cut since December last year as the MPC attempted to boost the sluggish economy.

However, rising inflation caused by soaring food and fuel prices had led many economists to urge patience before another change, so the full implications could be assessed in terms of spending and wages first.

When the MPC last met in May only one of its nine members voted for another cut.

Today's decision matched a Reuters poll last week of interest rate predictions from 71 economists. Only two forecast a cut this time but 40 predicted one would come before September.

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