Bank of England MPC Votes to Keep Rates on Hold at 0.5% - Vantage FX Comments
London (PRWEB UK) 18 December 2013 -- As expected, the MPC voted to hold UK interest rates at 0.5% with a decisive 9-0 result.
The minutes indicate that the UK economy is recovering faster than both the Eurozone and the US, particularly with the lowest unemployment rates (7.4%) since April 2009. Read the full Monetary Policy Committee Minutes.
Vantage FX’s Head of Market Analysis Jay Mawji commented:
“The Bank of England woke up to the reality of the impact of interest rate speculation on the UK economy. As the pound appreciates on the back of possible rate hikes, the stronger pound affects potential GDP. All 9 members voted to keep rates on hold and maintain the current bond-purchase programme. Mark Carney reiterated the importance of a 7% unemployment level before any policy shift can be considered.”
The pound strengthened to its highest point in 7 weeks (by 0.5% at least when compared to others (6.1% in the last 6 months)) and advanced to 83.96 pence per euro before 2pm GMT. Good for the UK (it may be the first major economy to raise rates in 2014) but if it grows too much diminished inflation pressure could weaken the recovery in the long run.
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Robert Berkeley, Vantage FX UK, http://www.vantagefx.co.uk/, +44 2076218925, [email protected]
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