Bank holds rate

Posted: 10 Jan 2008 14:51:33 GMT

The Bank of England's Monetary Policy Committee (MPC) has held the base rate of interest for January.

The Bank of England's Monetary Policy Committee (MPC) has held the base rate of interest for January.

A meeting took place today (January 10th) in which it was decided that the rate should remain at 5.5 per cent.

Prior to the announcement, analysts were divided in their opinion over which way the MPC would vote.

However, most now expect to see a cut in February following the publication of the Quarterly Inflation Report.

"The MPC was right to resist cutting interest rates today. We've seen a mix of data so far in January and after cutting rates pre-emptively in December, the MPC members have now voted to pause for thought," said Trevor Williams from Lloyds TSB Corporate Markets.

"Inflation is the key concern of the MPC and they clearly wanted to wait until February's quarterly inflation report, which brings all of these factors together, for reassurance that the time is right to cut interest rates again.

"Today's decision is likely to have been a close call. Next month will be close again, but with the latest inflation report available and assuming data is sufficiently gloomy, we are likely to see that much anticipated interest rate cut," he added.

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