Member Article

Interest rates remain at 0.5%

THE Bank of England yesterday confirmed that the base interest rate will remain at 0.5% for the 22nd consecutive month.

Concerns over rising inflation, spurred by the New Year VAT hike, failed to prompt the Bank’s Monetary Policy Committee (MPC) to increase rates for the first time in nearly two years.

In November inflation hit 3.3% as measured by the consumer price index (CPI) - higher than the Bank’s 2% target.

The NECC welcomed the decision, saying it was clear evidence of the banks’ dedication to provide stability in the market place.

Martyn Pellew, president of the North East Chamber of Commerce (NECC), said: “The Bank of England is aware that there is a risk of damaging business confidence and will not want to risk unsettling the current situation while the economic recovery is weak.

“Keeping interest rates unchanged will ensure there is continuity while businesses embark on a new year of trading and adjust to changes including the increase in VAT.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .