MPS Emphasizing Over Low Bank Rate

MPS Emphasizing Over Low Bank Rate

It has been reported that the Monetary Policy Committee (MPC) is against the idea of increasing the Bank Rate. The MPC is pushing for a record-low level of Bank Rate. The members of the committee have voted for keeping the bank interest rates low at 0.5% level.

As many as nine committee members have expressed their desire to keep the bank rate low. However, just two have voted against of it. While making a decision over the bank rate, the MPC’s members said that their decision is governed by the increased fuel prices which are posing a risk to the growth of the economy.

The policymakers were reported as saying, “There was a risk that this might be a less powerful restraining force in the future, especially if another round of energy price rises were to materialize”. It is expected that the inflation might get a little higher, which would adversely affect the economy.

However, it is further predicted that the inflammation would fall by 2% by the end of this year. Because of the sluggish recovery of the economy, the inflation would be witnessed at a higher pace, this year. The MPC has emphasized over maintaining low level of Bank Rate so that control over inflammation could be established.