The Bank of England left interest rates on hold on Thursday, saying the renewed fall in oil prices meant inflation was likely to stay lower than previously expected.
The decision to keep the main interest rate at a record low 0.5%, which was in line with economists’ expectations, comes at a time of growing concerns about the health of the global economy.
Only one member of nine from the BoE’s Monetary Policy Committee (MPC) – Ian McCafferty, voted for a rate rise, leaving an 8-1 majority in favour of keeping rates unchanged. The MPC unanimously decided to keep the Bank’s quantitative easing programme at £375bn.
Mark Carney, the Bank of England governor, highlighted the strength of the domestic UK economy in a speech he made late on Thursday, indicating that he still thought the conditions were right to consider raising interest rates around the end of this year. Carney was speaking at a global economy debate on the margins of the International Monetary Fund and World Bank annual meetings in Lima.
The Governor insisted that the US Federal Reserve’s decision on monetary policy was “not decisive” for the bank.
“We will determine the timing for the start of the process of monetary policy normalisation consistent with UK [conditions],” said Mr Carney, highlighting the limited effect of the Chinese fortunes on the British economy.
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