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Bank rate kept at 5%

08 May 2008

Monetary Policy Committee (MPC) holds UK interest rates this month

The Bank of England Monetary Policy Committee (MPC) has announced that they will be keeping UK interest rates at 5% this month.

This outcome was widely expected, however many analysts are now predicting that in June rates will be reduced by 0.25% to 4.75%.

The decision by the MPC to keep rates as they were came despite the influx of ‘downbeat data’ this week which added to worries about the current state of the UK economy.

However, there are still worries about keeping inflation down as fuel and food prices keep rising.

Ian McCafferty, chief economic adviser to the CBI business group said: “The latest data shows the economy is slowing, albeit only gradually, and at the same time inflationary pressures continue to mount.

“The bank faced a difficult decision but it is no surprise that rates were kept on hold this month.”