MPC Votes to Uphold Current Level of Base Rate
The Bank of England Monetary Policy Committee on Thursday convened for the monthly meeting, and the focus once again was the rise in base rate. The vote at the conclusion of the meeting sat at 8 to 1 in favor of keeping the rate at its ultra-low point of 0.5%. Factors which could have altered the vote on Thursday include inflation level, the uneasy situation in China, and the value of the sterling. None of the prevalent issues affected the vote and the low base rate will continue at least for another month.
There was one person on the committee who voted to increase the base rate now instead of later. That person was Ian McCafferty. He voted for the base rate to be increased from the current level of 0.5% to 0.75%.
Economists are now staying with their forecast for the base rate to be increased at the beginning of next year.
Vicky Redwood of Capital Economics commented on the issues around the globe which could affect the base rate, saying: "The MPC doesn't appear too shaken by recent global developments, which it said did not materially alter its central view."
Redwood added: "Indeed, the minutes highlighted that inflation should still pick up around the turn of the year."
Estimates for the interest rates to be increased in the US next week are still unclear. It would be the first increase since the economic crisis in 2007. This could be added to the list of issues which could have an effect on the increase in the UK base rate.