Bank of England: Interest rate held at 0.5%

Commenting on the decision, Graeme Leach, Chief Economist at the IoD, said:

“The MPC was always going to hit the pause button in December and we think they will do the same in January as well. But thereafter views are beginning to polarise. The IoD thinks the economy will soften in early 2011 as a result of the VAT hike, the squeeze in real earnings growth and the already low savings ratio. On top of this, we remain concerned about the anaemic rate of money supply growth, which, if it continues, will lead to more QE next year.”

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