Home.co.uk
Home.co.uk

News: Bank leaves interest rates unchanged

As expected the Bank of England has opted to keep interest rates on hold at 4.5% - largely because it's adopting a 'wait and see' posture ahead of the Christmas retail sales figures.

This latest non-move comes against the backdrop of the Chancellor, in his pre-Budget Report, scaling back his 2005 economic growth forecast for the UK to 1.75% from an earlier forecast of 3% to 3.5% - citing a variety of reasons including the inflationary impact of higher oil prices.

That said, the latest inflation report out of the Bank of England forecasts inflation to be close to the Bank's self imposed annual target of 2% over the next couple of years. However, this is based on the assumption that oil price rises will have no impact on wages. That's by no means guaranteed.

In the meantime the Bank will be keeping a keen eye employment, economic growth, and inflation trends over the next few months before determining whether any change to the core interest rate is required.

Back to: News Index