The Bank of England’s Monetary Policy Committee (MPC) met for their November gathering on Wednesday and while there had been some expectation of another cut to the interest rate, it did not happen. Early this week forecasts switched from a possibility of a decrease to the standard base interest rate to a steady hold due to the strength of the economy which has shown to be more resilient in the wake of the Brexit vote than expected. Therefore, the 0.25% standard base rate will remain intact another month.

The 0.25% rate is the lowest ever in the Bank of England’s 322 year history.

All members of the MPC voted to keep the rate steady, but warned that they are preparing for the possibility of above target inflation. The target rate is 2%. Inflation is thought to reach 1.3% for this year, but could reach 2.8% in 2017. This is an increase of 1.9% over the previous inflation forecast.

The MPC report stated, “Market intelligence attributes these latter movements to perceptions that the United Kingdom’s future trading arrangements with the EU might be less open than previously anticipated, requiring a lower real exchange rate to improve competitiveness and support activity.”

The UK economy is expected to show growth of 2.2% for 2016 and 1.4% next year.

In response to the GDP growth of 0.5% in the third quarter, the MPC reported, “These data suggest that the near-term outlook for activity is stronger than expected three months ago.”

Meanwhile, it will be interesting to see how lenders respond to the MPC’s hold on the standard base interest rate and the forecast for the economy. Currently there are very attractive remortgage and mortgage deals associated with cheap interest rates. Those should remain throughout the end of the year, but cautionary measure in the start of the year could see the lowest rates being pulled and lending tightening.

The Bank of England’s Monetary Policy Committee (MPC) met for their November gathering and while there had been some expectation of another cut to the interest rate, it did not happen. Therefore, the 0.25% standard base rate will remain intact another month.