The Bank of England’s Monetary Policy Committee has left the standard base rate unchanged. This leaves the rate unchanged since March 2009 at 0.5 per cent. They also voted to leave the 200 billion pound quantitative easing plan as is with no changes to the programme.
How long the rate will remain unchanged is unknown. The majority of analysts say it could be well into 2011 before there is a rise. Others see it changing before the end of the year and then several more times in 2011 to keep inflation under control.
Inflation was at 3.1 per cent in July. The fact that it is above the target goal of 2.0 per cent has pushed MPC member Andrew Sentance to call for a vote to change the rate up 0.25 per cent to 0.75 per cent. The votes have failed in the past and if it occurred at this month’s meeting it did so again. The minutes of the meeting will be released in two weeks.
Earlier today, Nick Clegg, the deputy prime minister said in reference to the economy: “Of course this recovery which is starting is likely to be choppy and uneven. Of course we appreciate we are dealing with a long-term problem about how you rebalance the economy in the way that I have described, away from over-reliance on financial services, away from reliance on public sector employment in parts of the country.
“That won’t be something that can happen overnight. But what I have talked about I think illustrates that we are putting in place the building blocks to make that happen.”