Bank of England MPC votes 8 to 1 to keep interest rates at 0.5%

8th October 2015


The Bank of England’s Monetary Policy Committee (MPC) has voted 8 to 1 to keep interest rates at their record low of 0.5% for another month.

Just Ian McCafferty voted for a 25 basis points hike to 0.75% – the third month in a row he has done so.

The cost of borrowing in the UK has now been at its historic low of 0.5%, for more than six years.

The minutes of the MPC’s meeting stressed “there was a range of views among committee members about the outlook for activity and inflation”.

Howard Archer, chief European & UK economist at IHS Insight commented that these differing views “largely centred on their views on the labour market, the prospects for global growth and the lags in the response of inflation to interest rate changes”.

In particular, the MPC considered that the “near-term outlook for CPI inflation appeared slightly weaker than at the time of the August Inflation Report” and it was “now likely to remain below 1% until spring next year”.

The consensus amongst economists is that a rate rise will not happen until early 2016.

But Archer added: “We increasingly lean towards the view that the Bank of England will wait until May before lifting interest rates from 0.50% to 0.75% rather than go in February.”

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