Belfast Telegraph

MPC unanimous in decision to hold 0.5% interest rate

Fears over a further deterioration in the economy were raised by Bank of England members this month although policymakers voted unanimously in favour of holding the level of emergency support.

The nine-strong Monetary Policy Committee (MPC) voted unanimously in favour of holding interest rates at 0.5% and keeping the level of quantitative easing (QE) at £275bn following October's decision to inject a further £75bn into the economy.

Minutes from the MPC's December meeting revealed that some committee members thought the outlook for the economy had deteriorated during the month and further money printing would be required in due course.

The Bank published its quarterly inflation report last month, in which it forecast a heightened risk of a double-dip recession and paved the way for another bout of QE.

The worsened prospects for the UK economy mean the Bank expects inflation to fall much more quickly than previously estimated, hitting the Government's 2% target in the second half of next year before falling to as low as around 1.3% in 2013.

However the MPC noted in its December minutes that it was a possibility that inflation would fall slower next year than the pace implied in its central projections.

The committee reiterated its concerns over the threat posed to the UK economy by the critical situation in the eurozone, although members noted an improvement in financial markets ahead of the summit in Brussels on December 9.

£75bn

The amount of QE pumped into the economy in October

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