Bank of England Keeps Interest Rates on Hold

Investing.com – As expected, the Bank of England (BoE) decided on Thursday to leave interest rates on hold.

Specifically, the BoE left the benchmark at 0.50%.

The decision to hike interest rates was unanimous with all members voting in favor.

Last month, the vote was split as seven policymakers voted to to 0.5%, but two deputy governors -Jon Cunliffe and Sir Dave Ramsden- wanted to leave rates on hold at just 0.25%.

Furthermore, all MPC members agreed unanimously to leave its asset purchase program unchanged as expected at ($583.6 billion) as well as to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion ($13.4 billion).

The from the meeting showed commented that recent news in the macroeconomic data has been mixed and relatively limited.

While global growth has remained strong, the BoE noted that, “domestically, some activity indicators suggest GDP growth in Q4 might be slightly softer than in Q3.”

The minutes also suggested that the labor market remains tight and the BoE expects that will continue.

“Although it is too early to arrive at a comprehensive view of the effect of November’s rise in Bank Rate on the economy, the impact on interest rates faced by households and firms has been consistent with previous experience,” the minutes explained.

After recent data showed inflation increased to 3.1% in November, the Monetary Policy Committee (MPC) stated that “inflation is likely to be close to its peak, and will decline towards the 2% target in the medium term”.

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