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MPC acknowledges ‘uncertainty’ over future course of base rate

The Bank of England’s Monetary Policy Committee has admitted it is “uncertain” over the path that base rate will follow during the next few years.

The minutes from this month’s rate-setting meeting reveal that all nine committee members voted to keep base rate at 0.5 per cent and all agreed it was “more likely than not” that base rate would rise in the next three years. Two members of the MPC said their decision to hold rates was “finely balanced”.

However, the committee said that while it still expects rates to rise gradually – when they eventually increase – this is merely guidance and economic factors will determine the pace of any increases.

The minutes say: “The actual path Bank rate would follow over the next few years was uncertain and would depend on economic circumstances.

“The committee’s guidance on the likely pace and extent of interest rate rises was an expectation, not a promise.”

Capital Economics senior UK economist Samuel Tombs says: “With CPI inflation unlikely to approach the 2 per cent target until well into 2016 and productivity primed for a recovery, we think there will be little pressure on the MPC to raise rates this year.”

All nine members voted to keep the Bank’s programme of quantitative easing at £375bn.



Caption Competition – 29 April 2015

Can you put the boot into your nearest and dearest to win a delicious box of Hotel Chocolat milk chocolates? Submit a witty caption for the photo above and you will be automatically entered into our prize draw. Remember, the funnier it is, the more likely you are to win. What are you waiting for? […]


Scam property fund wound up

The High Court has wound up a scam property fund that took £880,000 from investors and promised returns of up to 51 per cent a year. The FCA says the fund was wound up earlier in April at its request and a liquidator appointed to investigate Hermay’s activities. It says the firm had been accepting […]


April’s average asking price is highest on record

The average UK property asking price rose by 4.7 per cent year-on-year in April to £286,133, according to Rightmove. The annual rate of inflation fell from 5.4 per cent in March but April’s average asking price is the highest on record. On a monthly basis, asking prices were up 1.6 per cent, a rise of […]


Tories plan help for older borrowers

The Government will appoint a minister to stop lenders unfairly discriminating against older borrowers if it wins the general election. Ros Altmann, the Government’s older workers’ champion, will be made a peer and appointed as a minister responsible for financial consumer protection and education if the Conservatives are in government after the election. Part of […]


Health Shield joins the Association of Medical Insurance Intermediaries

Health cash plan provider Health Shield has joined the Association of Medical Insurance Intermediaries (AMII) as a corporate member. The non-profit-making Friendly Society is one of eight health cash plan providers to join the intermediary trade body, which is looking to establish working parties with intermediaries and providers on issues such as product innovation and regulation.


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