Belfast Telegraph

Bank of England keeps interest rates on hold

By Roger Baird

The Bank of England kept interest rates at record lows as policymakers said the UK economic outlook had weakened and inflation was likely to stay lower for longer.

Members of the Bank's Monetary Policy committee (MPC) voted eight to one to keep rates unchanged at their historic lows of 0.5%, where they have now remained for more than six years.

The MPC's decision comes amid increasing concern over the global economy, as well as signs of slower-than-expected UK growth.

Global stock markets have tumbled since the start of the new year after a run of poor economic data in China and interruptions to trading in Chinese stocks, which saw £85bn wiped off the value of top flight firms on the London market last week.

Minutes of the latest MPC meeting showed the Bank believes UK growth has also been weaker than predicted and that inflation will remain far below its 2% target.

It lowered its outlook for GDP growth in the fourth quarter of last year and first quarter of this year by 0.1 percentage points to 0.5% in each quarter. This follows growth of 0.4% in the third quarter. The minutes showed the Bank believes "continued quarterly growth at rates of around 0.5% were likely around the turn of the year.

Belfast Telegraph