MPC holds interest rates

News Category: Industry News

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The Monetary Policy Committee (MPC) of the Bank of England has opted to keep interest rates unchanged in September.

Earlier today (September 6th) the MPC announced that interest rates would stick at 5.75 per cent for the month.

The MPC cited the fact that July's inflation report showed that consumer price index (CPI) inflation slipped down to 1.9 per cent as one of the main reasons that interest rates were frozen for the month.

However, the Bank also noted that the recent financial crisis which has hit the world's market could also have an impact on future interest rate decisions.

A statement from the MPC noted: "It is too soon to tell how far the disruption in financial markets will impair the availability of credit to companies and households.

"As stated in its August Report, the MPC is monitoring closely the evolution of both credit spreads and the quantities of credit extended, alongside all other data relevant to the outlook for inflation."

Rics chief economist Simon Rubinsohn commented: "The housing market, which has continued to display considerable resilience over the past month, is particularly at risk as the diminished access to finance from non-prime borrowers begins to impact on the level of mortgages approvals.

"In addition, past rate hikes are yet to filter fully through."

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