You are here: Home - Saving & Banking - News -

Base rate held at 0.75% but vote still split

Written by: Shekina Tuahene
The Bank of England’s (BoE) Monetary Policy Committee (MPC) voted 7-2 to hold the bank's base rate at 0.75 per cent, with the two dissenting members voting for a rate reduction.

Members Jonathan Haskel and Michael Saunders went against the vote, both proposing a cut to 0.5 per cent. This is the second month in a row they have voted to lower the rate to 0.5 per cent.

This falls in line with comments Saunders made in September where he suggested that in the event the UK avoids a no-deal Brexit, the next base rate move would be down instead of up.”

Monetary policy still uncertain

The BoE maintained its stance on which direction monetary policy could go, despite the Conservative election victory.

The central bank noted it “could respond in either direction to changes in the economic outlook in order to ensure a sustainable return of inflation to the two per cent target”.

The committee said it would monitor how businesses and households responded to Brexit developments in order determine its next move.

Continued caution

Frances Haque, Santander UK chief economist, said: “The decision to hold rates was widely expected given the outcome of the general election increases the certainty of the UK leaving the EU at the end of January, reducing the risk of a continuing ‘slow puncture’ in the UK economy.

“The economic data published so far for the last quarter of this year indicates that growth will likely be weak or perhaps even negative and continues to depend on consumer spending to fuel growth.

She added: “However, with inflation well below the target rate and with the likelihood of reduced uncertainty, at least in the short term, the MPC is clearly standing by its cautious approach and will wait to see what type of momentum is carried into the beginning of 2020.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week