Bank of England chief economist pushes for rate rise
By Emma Simon
The Bank of England’s Monetary Policy Committee has voted to keep interest rates on hold at 0.5 per cent, but with an increased number of members calling for a rate rise.
Chief economist Andy Haldane has joined those calling for a rise. The BoE revealed that six members voted to keep rates on hold, with three voting to push up interest rates.
There was almost universal agreement among economist and housing experts that the BoE would keep rate son hold this month. However the news that Haldane has turned “hawkish” on rates will increase expectations that rates will rise later this year.
AJ Bell investment director Russ Mould says: “Today’s inactivity may reflect lingering doubts over the underlying strength of the UK economy, which appears to be mired in another soft patch.”
He says: “This heaps more pain on savers as inflation continues to comfortably outstrip the meagre interest earned on their cash and real wage growth remains negligible.”
Zurich retail platform strategy head Alistair Wilson adds: “Following UK inflation unexpectedly staying at a one-year low, and with wage growth also slipping, the chance of a rate rise is even less unlikely. Consumers will now have to hold tight for at least another few months, potentially longer.
The Bank of England was forced to put off a widely expected rate rise in May after weak first economic growth in the first quarter of the year. However, the Bank has indicated that it believes this weakness was temporary, caused in part by the bad weather.