MercoPress, en Español

Montevideo, October 3rd 2023 - 19:40 UTC



Bank of England leaves rates unchanged as UK economy recovers

Friday, May 9th 2014 - 22:15 UTC
Full article 25 comments
BCC chief economist David Kearn, “ a rate rise would be premature” BCC chief economist David Kearn, “ a rate rise would be premature”

Interest rates have been held at the record low of 0.5% for another month by the Bank of England and so has the size of its bond-buying economic stimulus program unchanged at £375bn.The news is in line with analysts' expectations, despite recent evidence that the UK economic recovery is strengthening.

 Worries about rising house prices in parts of the UK have intensified the debate over when rates might increase.

The Bank's Monetary Policy Committee (MPC) have kept rates at the historic low of 0.5% for more than five years, amid worries that the finances of many individuals and businesses remain too weak to withstand a rise.

But the pace of economic recovery is picking up, and last week the Organization for Economic Co-operation and Development (OECD) raised its UK growth forecast for this year from 2.4% to 3.2%.

The OECD did, however, sound a warning that the housing market could be overheating. It said that the UK government should consider restricting access to the Help to Buy scheme, which provides mortgage guarantees and loans to people struggling to find deposits on homes.

The British Chambers of Commerce said on Thursday that a rate rise soon would be “premature”.

BCC chief economist David Kern said: “The decision to maintain interest rates and quantitative easing was unsurprising and appropriate.

”Businesses need clarity that encourages them to increase investment, and at the moment the MPC is delivering this. However its efforts are hampered by repeated calls for interest rate rises whenever a piece of positive news is published.

“Such a move would be premature. The MPC should instead strengthen the clarity of its forward guidance message.”

Many economists have penciled in a rate rise early next year. The Bank hinted in February that the second quarter of next year was a possible timeframe.

Categories: Economy, International.

Top Comments

Disclaimer & comment rules
  • reality check

    Oh dear perhaps we should have followed the Argentine model?

    May 09th, 2014 - 10:22 pm 0
  • paulcedron

    the UK economic recovery is strengthening?
    then, it is even sadder

    “The number of Britons using food banks to survive is set to top a million this year as a record number of families ask for the emergency handouts.”

    “Dr Rowan Williams: Food bank users are not scroungers and this isn't a hiccup - it’s a serious crisis”

    “Church of England bishops demand action over hunger”

    “Britain faces food poverty ‘national crisis’ because of Government welfare reforms, bishops warn”

    May 10th, 2014 - 01:51 am 0
  • Troy Tempest

    2 Pablo niño

    Where do you get your quotes from ?
    There are no links to substantiate them.

    You must be making it up !!! LOL !

    By contrast, here is what is happening in Argentina:


    up to 25 MILLION PEOPLE !!!

    And here are the links that say that:
    You have been the last person to comment on this article.

    May 10th, 2014 - 03:26 am 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!