BoE leave interest rates unchanged at 5.75%
02 August 2007
As widely expected, the Bank of England elected to leave interest rates unchanged at 5.75% during today’s meeting following the decision to hike last month. The minutes from the previous meeting revealed a 6-3 vote creating some uncertainty about the outlook for UK interest rates in the months ahead. Therefore, today’s decision will come as little surprise to the market with the committee likely to continue their ‘wait and see’ approach before tightening again.
In the meantime, the UK economy remains robust and whilst the housing market appears to be starting to feel the pinch of five rate rises in the past year, prices are still rising steadily. Inflation is also likely to remain a concern with many price indicators still indicating that inflationary pressures are still rife. With the money markets still pricing another hike before the end of the calendar year, the market will close attention to the minutes from today’s meeting and next week’s quarterly inflation report for an indication as to the likelihood of a rate hike in September.