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Interest rate hold 'based on global weakness'
Posted by Francesca Witney
Continuing economic weakness both at home and overseas was the primary reason behind the Bank of England's decision to maintain interest rates once again.
That is the opinion of Ian McCafferty, chief economic adviser at the Confederation of British Industry (CBI), who believes the Bank's Monetary Policy Committee (MPC) was correct to hold the figure at 0.5 per cent for the 29th month in succession.
Officials at the MPC decided that Britain is not yet in a strong enough position financially to handle a base rate hike and Mr McCafferty stated this was largely due to "growing evidence of a softening of the global economy combined with rising inflation expectations in the UK".
The CBI official went on to note that this trend is not likely to end any time soon, as there will be no "clear evidence" the economy can handle a rise "before the end of the year".
05/08/2011 15:55
News category: Consumer