As expected the Bank of England’s Monetary Policy Committee (MPC) has decided to leave interest rates on hold and will not restart quantitative easing (QE) measures.
Although the decision was expected, the Bank is facing increased pressure as inflation remains above its target level. In November CPI (Consumer Prices Index) stood at 3.3%, significantly above the Bank’s 2% target. CPI has been at least 1% above the target level for the past 12 months.
Two members of the MPC have previously indicated that they favour a change to policy, Andrew Sentance has advocated a rate rise to try and push down inflation and Adam Posen has previously voted for additional QE measures. Both have been out voted by other members of the MPC.