BoE keeps policy rates at 6-yr high
Bank of England left the benchmark interest rates unchanged at a six-year high to determine whether a surge in credit costs will harm the British economy.
By Agencies |
LONDON: The Bank of England (BoE) left the benchmark interest rates unchanged at a six-year high, saying it’s trying to determine whether a surge in credit costs will harm the British economy.
The Monetary Policy Committee, led by governor Mervyn King, kept the bank rate at 5.75%. The bank will release the minutes of the decision on September 19.
“The recent solid pace of output growth has been sustained,” the bank said in a statement, its first that accompanied an unchanged decision since 1999. “It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households.”
The central bank took its first steps to reduce UK money-market rates, which have climbed to the highest since 1998, following the collapse of the US subprime mortgage market. The turmoil has clouded the economic outlook less than a month after the bank signaled that five rate increases in the past year may not be enough to contain inflation.
The bank “is showing that they are conscious of the effects on the economy and that they’re willing to act,” said Michael Saunders, chief western European economist at Citigroup.
The Monetary Policy Committee, led by governor Mervyn King, kept the bank rate at 5.75%. The bank will release the minutes of the decision on September 19.
“The recent solid pace of output growth has been sustained,” the bank said in a statement, its first that accompanied an unchanged decision since 1999. “It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households.”
The central bank took its first steps to reduce UK money-market rates, which have climbed to the highest since 1998, following the collapse of the US subprime mortgage market. The turmoil has clouded the economic outlook less than a month after the bank signaled that five rate increases in the past year may not be enough to contain inflation.
The bank “is showing that they are conscious of the effects on the economy and that they’re willing to act,” said Michael Saunders, chief western European economist at Citigroup.
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