The Bank of England has voted to keep interest rates on hold once again in its December meeting — as analysts had expected.
The BoE has been on hold as far as interest rates are concerned since March 2009, when the monetary policy committee cut Bank Rate to 0.5%.
Once again, a single member of the 9-person MPC voted for a 0.25 percentage point rate hike, and 8 voted to keep the rate where it is for now.
What markets are looking for is any signal of how close the Bank is to raising interest rates. UK unemployment is now at just 5.3%, the lowest since 2008 and far from its crisis-period peak above 8%.
Real wage growth has also returned, and most members of the MPC (except BoE chief economist Andy Haldane) are clear in suggesting that the next move from the Bank will be a rate hike, which will begin a steady tightening cycle, raising interest rates slowly.
Despite the lower unemployment and returning wage growth, there’s no sign of any inflation — due to plunging oil prices, consumer prices have been bobbing along at around zero growth for most of 2015.
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