Bank of England holds base rate for 79th consecutive month

The Bank of England’s monetary policy committee has again voted to maintain the base rate at 0.5 per cent.

The decision makes it more than six and a half years since the BoE last changed the rate.

Of the MPC’s nine members, Ian McCafferty was again the only dissenter, arguing the base rate should climb by 25 basis points to counteract the risk that inflation could leap up beyond its two per cent target.

The MPC voted unanimously to maintain quantitative easing at £375bn.

In minutes from the committee’s meeting, members said while there are risks that the slowdown witnessed in China could intensify, growth in the Euro area remains resilient.

The MPC also noted evidence of labour skills shortages in the UK, with demand strengthening.

However, it said while annual private sector pay growth now exceeds 3 per cent, signs of improvement in productivity growth have limited the impact on business costs, and therefore inflation more broadly.