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Base rate decision unanimous

Base rate decision unanimous

Category: Economy

Updated: 17/06/2009
First Published: 17/06/2009

MONEYFACTS ARCHIVE
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The decision to freeze the Bank of England's base rate of interest at a record low 0.5 per cent was a unanimous one, minutes of the Monetary Policy Committee (MPC) meeting show.

On being invited to vote on Governor Mervyn King's proposition that the base rate should be held at 0.5 per cent and the quantitative easing programme continue, the Committee all voted in favour.

During the meeting, the MPC also acknowledged some encouraging signs in the economy. It was noted that financial market sentiment had generally improved during the month.

"The news over the month had been mostly encouraging," the MPC said. "Conditions in the financial markets had continued to improve.

"Activity indicators of Q2, especially the PMI surveys, suggested the rate of contraction in the global and UK economies had slowed, and there were signs of improving business confidence."

Housing market activity was adjudged to have picked up over the month, with positive data from the Royal Institution of Chartered Surveyors, Nationwide and Halifax all referred to.

However, the MPC did recognise that activity remains subdued and the level of loans approved for house purchases are less than half the average over the last decade.

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