BOE signals rate can stay low as inflation weakness persists
London
BANK of England policymakers said the UK economy is withstanding international pressures, while also signalling they have room to keep the benchmark rate at a record low as inflation weakness persists.
In the minutes of its October meeting, the Monetary Policy Committee weighed risks of a further global slowdown against resilient domestic demand and consumer spending. It said the near-term outlook for inflation had weakened since August and price growth will probably stay below one per cent until spring 2016. Officials voted 8-1 to keep the key rate at 0.5 per cent, with Ian McCafferty maintaining his call for an increase.
Inflation at zero, combined with an "easing in the pace of activity", may keep the MPC on a cautious footing as it judges when to begin removing the emergency stimulus it put in place during the financial crisis. Investors haven't priced in a rate increase until late 2016 and short-sterling futures rose after the minutes were re…
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