- Monetary Policy Committee
The Bank of England remained split eight-to-one on interest rate decision in January. Yet, the central bank maintained its key interest rate on hold, as falling stock markets spark concerns that the world economy could be experiencing a bumpy ride in the near term, while lower oil prices and sluggish wage growth continue to weigh on inflation. The BoE kept the benchmark rate unchanged at the record low of 0.5%, while Ian McCafferty remained the only dissenter, voting for an immediate hike of 0.25 basis points. In the minutes of the January meeting, the Monetary Policy Committee said the expected recovery in inflation would be "a little more modest than previously assumed," while business surveys signal a slower pace of growth. Policy makers revised downwards their estimates for expansion last quarter and this quarter to 0.5%.
The central bank have maintained borrowing costs on hold for almost seven years and is showing little inclination to start normalizing its monetary policy any time soon. The world's leading banks including Goldman Sachs Group Inc., Bank of America-Merrill Lynch and JPMorgan Chase & Co. have pushed back their expectations for the timing of the first rate hike to the final quarter of the year, while investors doubt the BoE will raise rates until the middle of 2017.
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