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22 Nov 07 - Rates frozen amid inflation fears
Continuing concerns over inflation led the Bank of England
to hold interest rates in November, it has been revealed.
Minutes from the Bank's Monetary Policy Committee (MPC)
meeting said members had kept rates at 5.75% after oil and
food prices soared dramatically. Members also said they
would "wait and see" before cutting rates, wary that a snap
decision could cost the economy in the long-term.
"There [are] risks attached to a pre-emptive cut if the
slowdown in activity was more muted, and the rise in inflation
in the early part of the forecast period was sharper than
expected," the minutes stated.
Experts had predicted that a cooling of the housing market
and slowing business activity would lead to a cut in rates,
after the Bank's latest inflation report signalled there
may be two cuts next year. However, the MPC's latest move
suggests the Bank will be taking a more cautious approach.
ING economist James Knightley said: "We suspect that the
Bank will want firmer evidence that the economy is slowing.
"Moreover, with inflation being pushed higher by food and
energy costs - the uncertainty factor may keep the MPC on
hold for a couple of months."
Source: Bank of England
News items supplied by SelectNews, produced by PA Business,
part of the group that owns The Press Association, the UK's
national news agency. Copyright (c) PA Business 2007.
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