UK interest rate 'unlikely to change'

by Christopher Evans

The UK interest rate is unlikely to change when the Bank of England's Monetary Policy Committee (MPC) meets tomorrow (July 8th).

This is the view of Charles Davis, managing economist at the centre for economics and business research, who said: "If you look at the data the recovery is not robust yet, the recovery is in [play] but it is still at a relatively early stage and we still have got an unprecedented fiscal policy tightening coming almost immediately.

"There is [a] fairly strong case to keep monetary policy looser for longer as long as there is that fiscal policy focus."

However, when the MPC met on June 10th, Dr Andrew Sentance voted against maintaining the base rate because of fears over inflation.

Instead, he voted to raise the rate by 25 basis points.

The outcome of the meeting could greatly affect landlords with tenancy agreements over whether or not they decide to expand their property portfolio.

It was announced this week that Martin Weale has been appointed as the new external member on the MPC, succeeding Kate Barker.

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Published on: July 7, 2010

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