Interest rates held again in May
This month's decision see rates still at record low of 0.5%.
As expected, the Bank of England’s Monetary Policy Committee (MPC) left interest rates on hold at their record low of 0.5% at its May meeting.
The announcement of this month’s decision was delayed until today to avoid conflicting with the General Election.
With inflation falling to 0% and economic growth also slowing, there is little pressure currently on the MPC to raise rates.
The decision means the new Parliamentary term begins with interest rates at the same level they were for the entire duration of the Coalition Government.
The Bank of England will provide more detail on where it thinks interest rates and inflation are heading when it publishes its latest quarterly Inflation Report on Wednesday (13th May).
There was a unanimous vote for rates to remain on hold at April’s meeting. However, a couple of members of the committee had said that the decision was “finely balanced”, so it will be interesting to see whether their opinions have changed following the low inflation figures.
In its last Inflation Report, the Bank of England forecast that inflation would return to its 2% target within the next two years, but that it would remain low this year.
Experts are forecasting that rates will remain on hold until next year, which is in line with what the Bank of England has forecast.
This means a likely continuation of the record-low mortgage rates we’re seeing right now, for the short term anyway.
Unfortunately for savers it’s not such good news and means it’s worth looking at the likes of current accounts and peer-to-peer savings if you want a greater return on cash.
Keep on top of your finances anytime, anywhere with loveMONEY's Plans
More from loveMONEY.com:
Comments
Be the first to comment
Do you want to comment on this article? You need to be signed in for this feature