BoE Holds Rates at 0.5 Percent

UK interest rates have been held at the record low of 0.5% for another month by the Bank of England.

The size of the Bank’s bond-buying economic stimulus programme was also kept unchanged at £375bn.

The decision was widely expected, despite continued signs of strength in the UK economy.

Last month, the Bank of England reiterated it was in no rush to raise rates, with governor Mark Carney saying they may remain low “for some time”.

However, Mr Carney added the economy had “edged closer” to the point where interest rates would need to rise.

Commenting on the bank’s announcement, David Kern, chief economist at the British Chambers of Commerce said: “The decision to keep interest rates and quantitative easing on hold was the right one”.

And he added: “With annual CPI inflation below target, the MPC can afford to wait before tightening their policy. The strong rise in sterling over the past year, making UK exports more expensive, is an important reason for not raising interest rates prematurely”.


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza