Bank of England leaves interest rates unchanged
11 March 2005
Yesterday’s decision by the monetary policy committee (MPC) had been predicted by a Reuters poll of 50 economists and a Bloomberg survey of 35 financial experts, all of whom were sure there would be no change.
The MPC’s decision is likely to have been affected by a lack of evidence of an increase in consumer spending.
The seven-month period of static interest rates, the longest such period since the beginning of 2003, comes after a series of increases between October 2003 and August 2004 halted a boom in house prices and weakened consumer spending.
Any decision not to increase interest rates is good news for borrowers – but economists are expecting a rates hike later in the year.
“If the Monetary Policy Committee doesn’t want to change interest rates during an election campaign, it will have to wait until June,” said Graeme Leach, chief economist at the Institute of Directors.
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