UK Base Rate Remains at 0.50%

All nine Bank of England policymakers voted to keep interest rates on hold this month, after two of them dropped calls to raise rates from 0.5%.

Two members of the Bank’s Monetary Policy Committee (MPC), Martin Weale and Ian McCafferty, had been calling for a rate rise since August.

However, January’s MPC minutes showed they felt a rate rise now might cause below-target inflation to persist.

Analysts are now predicting that rates will not rise until 2016.

Last month, inflation dropped to 0.5%, its lowest rate in more than 14 years and well below the Bank’s target of 2%.

As inflation is now more than one percentage point away from the Bank’s target, governor Mark Carney will have to write a letter of explanation to the Chancellor, George Osborne.

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