08 December 2006
The Bank of England has announced that the base rate of interest will remain at five per cent for another month.
The bank’s monetary policy committee (MPC) has voted in favour of keeping interest rates on hold for December, in line with analysts’ expectations.
Following last month’s quarter point increase in the cost of borrowing, the MPC was widely expected to hold rates, despite strong housing market growth, high employment and healthy wage inflation in the UK.
Inflation is currently around 2.4 per cent, slightly in excess of the government’s two per cent target, but the MPC is also forecast to hold rates at the January meeting, with a possible increase in February 2007.
The base rate of interest is currently at its highest level since September 2001 following quarter point increases in both August and November this year.