Bank rate on hold, pound reaches new record against US dollar

08 11 2007 United Kingdom

Bank rate held at 5.75 per cent for fourth month in succession.

In spite of the steadying of consumer prices and concerns over an economic slowdown, the Bank of England’s Monetary Policy Committee today voted to maintain the official bank rate at 5.75 per cent.

The September consumer prices index showed stable inflation at only 1.8 per cent, below the MPC’s 2 per cent target. Manufacturing output dropped by 0.6 per cent in September and activity in the services sector fell to its lowest in more than four years.

However, the MPC’s worries over inflationary pressures in the UK have been strengthened by oil prices reaching record levels, yesterday climbing above $98 a barrel for the first time.

The dollar continued to fall, pushing Sterling up to $2.11, a record level since 1981.

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