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07/11/2002
Bank of England holds UK interest rate at 4%
The Bank of England has held the main UK interest rate at 4% for the twelfth consecutive month.
This is despite a larger than anticipated cut by the US Federal Reserve. Leading economists were split on whether or not interest rates would or should be dropped. Many of those in favour of an interest rate cut were looking to the US market for a drop which might have heralded a cut in the UK rate.
However, despite the US Federal Reserve's decision to cut interest rate by half a percentage point, taking the interest rate to 1.25% in a bid to firm up a weak recovery in the US economy, the UK's Monetary Policy Committee (MPC) were unimpressed with the arguments for a rate cut.
Next week the MPC is expected to publish projections on inflation over the next two years, and the decision to hold the interest rate at 4% is being interpreted as an indication that the MPC think that inflation may rise to near the 2.5% target inside the two-year period.
However, with the manufacturing sector continuing to be hit by the relatively high UK interest rate, the Engineering Employers Federation called for a UK rate cut. Opposed to this the retail sector indicates that there is no pressing need to cut rates as the twin-track UK economy displays healthy retail sales figures for October.
One of the main fears about an interest rate cut is that this may seriously overheat the runaway property sector. House price inflation recently topped 24% to reach its highest level since the 1980's boom, which resulted in negative equity problems for many when prices slumped in a housing market rationalisation.
(SP)
This is despite a larger than anticipated cut by the US Federal Reserve. Leading economists were split on whether or not interest rates would or should be dropped. Many of those in favour of an interest rate cut were looking to the US market for a drop which might have heralded a cut in the UK rate.
However, despite the US Federal Reserve's decision to cut interest rate by half a percentage point, taking the interest rate to 1.25% in a bid to firm up a weak recovery in the US economy, the UK's Monetary Policy Committee (MPC) were unimpressed with the arguments for a rate cut.
Next week the MPC is expected to publish projections on inflation over the next two years, and the decision to hold the interest rate at 4% is being interpreted as an indication that the MPC think that inflation may rise to near the 2.5% target inside the two-year period.
However, with the manufacturing sector continuing to be hit by the relatively high UK interest rate, the Engineering Employers Federation called for a UK rate cut. Opposed to this the retail sector indicates that there is no pressing need to cut rates as the twin-track UK economy displays healthy retail sales figures for October.
One of the main fears about an interest rate cut is that this may seriously overheat the runaway property sector. House price inflation recently topped 24% to reach its highest level since the 1980's boom, which resulted in negative equity problems for many when prices slumped in a housing market rationalisation.
(SP)
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Inflation rate fall may herald a further interest rate cut
Speculation is growing that a fall in the underlying inflation rate, down to 2.2 per cent, may give the Bank of England’s Monetary Policy Committee further room for manoeuvre to lower interest rates. Continued severe pressure on manufacturing industry has prompted further calls from industry leaders seeking another cut in the UK interest rate.
Inflation rate fall may herald a further interest rate cut
Speculation is growing that a fall in the underlying inflation rate, down to 2.2 per cent, may give the Bank of England’s Monetary Policy Committee further room for manoeuvre to lower interest rates. Continued severe pressure on manufacturing industry has prompted further calls from industry leaders seeking another cut in the UK interest rate.
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UK Interest rates sticks at 3.75%
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04 October 2001
UK interest rate receives further cut
The UK interest rate has been cut for the sixth time as economies around the world attempt to stem the effects of the current global climate of uncertainty. On Thursday October 4, the Bank of England’s Monetary Policy Committee announced a further 0.25 per cent cut, a move which brings the UK base rate down to 4.
UK interest rate receives further cut
The UK interest rate has been cut for the sixth time as economies around the world attempt to stem the effects of the current global climate of uncertainty. On Thursday October 4, the Bank of England’s Monetary Policy Committee announced a further 0.25 per cent cut, a move which brings the UK base rate down to 4.
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Northern Ireland WeatherThis Evening and Tonight:Another dry and mainly cloudy evening and overnight period, likely cloudiest towards coastal Down and Antrim. It will be a mild night in most places but a little colder where skies become clearer. Minimum temperature 7 °C.
