Bank of England keeps main interest rate unchanged at 4.75%

The country’s economy has now contracted for two consecutive months.

The Bank of England’s monetary policy committee (MPC) yesterday kept its main interest rate unchanged at 4.75 per cent, with data indicating 12-month CPI inflation rising to 2.6 per cent in November from 1.7 per cent in September.
The economy has now contracted for two months in a row.
Headline CPI inflation is expected to continue to rise slightly in the near term, the central bank said.

“Headline CPI inflation is expected to continue to rise slightly in the near term. Although household inflation expectations have largely normalised, some indicators have increased recently,” the central bank said in a release.

The central bank’s inflation target is 2 per cent. With little indication of inflation getting back to the target anytime soon, the MPC, which last cut its key rate in November, took a cautious stance as lower borrowing rates could stoke inflation.

Fibre2Fashion News Desk (DS)