The Bank of England kept the benchmark interest rate at 0.50%, with record low levels in place since March of 2009. Committee members involved in the voting process on policy remained unchanged in their positions, voting 8 to 1 to maintain policy with only McCafferty insisting on a hike to 0.75%. The BoE’s decision was made easier based on inflation below zero and recent mixed economic data along with a continued drop in oil prices. The strong sterling and weakening commodity prices are reducing the likelihood of inflation rising back to targeted levels over the near-term. A rebound depends on sufficient domestic cost growth being able to balance the drag on prices caused by global disinflation and increases in the value of the Pound. One item expected to improve the economic climate is fiscal spending cuts announced by the Finance Minister that will give a boost to growth next year.
UK Rates Stay Unchanged
Daily Analysis - 11/12/2015