Minutes from the January Monetary Policy Committee meeting reveal a near unanimous decision to freeze the rate at 5.5%.
Only David Blancheflower voted against the notion, suggesting a cut was necessary to counteract the worsening of global demand and the increased risk of sharp and persistent slowdown.
The minutes reveal the rate was maintained in order to avoid the impression that the MPC was more concerned with stabilizing demand than meeting its inflation target.
The next MPC decision will be made on February 7th, 2008.
In repsonse the Centre for Business and Economic Research says: "Whilst there was no immediate need for a cut the Committee members raised a number of risks to the economy in 2008.
"We do not expect inflation to prevent a 0.25% in February, the likelihood of which is increased by fears of recession in the US and the Fed's surprise 0.75% cut yesterday.
"However we can expect a far more conservative approach to cutting rates from the Bank of England with 0.5% cut unlikely following the stronger than expected GDP figures for the fourth quarter that werre relased today."
SOURCE: Mortgage Strategy |
