'THE TIMES'

noticia de economia en ingles del periodico 'THE TIMES' por Jose Luis Sanchez y Rocío Aguilar 1ºB

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Bank keeps interest rates at 0.5%

Gráinne Gilmore, Economics Correspondent

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The Bank of England has held interest rates at a record low of 0.5 per cent for the 15th consecutive month.
In a widely expected move the Bank’s Monetary Policy Committee voted not to change the base rate or to alter the £200 billion limit on quantitative easing.
Analysts said that although inflation continued to rise there was no real expectation that rates would alter. Many are forecasting no change in rates until next year.
Stephen Boyle, head of RBS group economics, said: “No change, no surprise. Inflation is well above target but real wage growth is negligible and people don’t expect prices to take off. Rates are going to stay where they are at least until the end of the year.”

It was also unlikely that the MPC would make any sudden rate moves before the emergency Budget on June 22.
Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club, said that she expected the MPC to hang on even longer before raising rates, although their decision will be influenced by the Chancellor’s announcements.
“We do not expect any monetary policy tightening until early 2011, when the economy will be in better shape. The pace of monetary tightening will inevitably depend on how vigorous a programme of fiscal consolidation will be implemented in the Budget.”
Sterling was unaffected against the dollar and the euro in the wake of the rate announcement. The pound is trading at $1.4624, unchanged from before the announcement and up 0.6 per cent on the day.
The Bank’s decision is in line with that of the Times MPC, which this morning voted unanimously for no change in rates.
The minutes of the Bank’s meeting will be published in a fortnight.