BoE votes to hold base rate in split decision

Michael Lloyd

November 7, 2019

The Bank of England has voted 7-2 to hold the base rate at 0.75% in the first split interest rate decision since June 2018.

MPC members Jonathan Haskel and Michael Saunders both voted to reduce the base rate to 0.5%.

The industry was not surprised by the decision to hold the rates.

Frances Haque, chief economist at Santander UK, said: “The decision to hold rates was widely expected, given the delay to the Brexit process and ahead of the general election due on 12 December.

“The economic data published so far for the third quarter of this year suggests the UK economy has returned to growth, although many of the fundamentals such as business investment and productivity remain weak.

“Given this, the MPC is clearly standing by its cautious approach.

“Unless there is a sudden downturn in the UK economy over the next few weeks, it’s unlikely we’ll see a change in rates this year with the MPC likely to wait until the outcome of the General Election is known.

“However, if Brexit is postponed again, continuing the uncertainty, the MPC may wish to act to bolster the economy.”

Alex Maddox, capital markets and digital director at Kensington Mortgages, added: “It’s not a great surprise to see that the Bank of England has kept the base rate on hold at 0.75%.

“Brexit extension after Brexit extension and now a December General Election mean that the bank is going to want to keep its powder dry.

“In the current environment, it would have been a very hawkish move to cut rates.

“While future decisions will very much depend on the nature and timing of Brexit, it now looks increasingly likely that a rate cut may happen in the new year to support the economy if Brexit is delayed again and this impacts businesses and investment.”


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