- Chris Williamson, chief economist at Markit
The Bank of England decided to keep its monetary policy highly accommodative amid soft data pointing the UK's economy has been cooling less than initially projected in the fourth quarter, as policy makers put more emphasis on risks stemming from low inflation as well as weak global economic outlook. The MPC, as expected, kept the interest rate at 0.5%, where it has been since March 2009, and the volume of QE at 375 billion pounds. The UK's consumer-driven recovery is poised to slow down modestly going into 2015, but economists and markets forecast no rate hike until deep into next year. Meanwhile, Britain's house price growth cooled in November as demand softened and a further slowdown in prices is likely into 2015, according to Halifax. House prices soared 8.2% in the three months to November compared with the same period last year, recording the smallest rise since February. On a monthly basis, prices climbed 0.4%, rebounding from the 0.4% decline in October. The Bank of England welcomed evidence that UK's housing market is cooling off after double-digit price increases earlier this year, partly restrained by new restrictions on mortgage lending. Price growth is likely to cool further in 2015 as the prospect of higher interest rates and the scale of recent increases discouraged some buyers. Halifax economists project prices nationally to rise in a range of 3-5% in 2015.
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