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Bank holds rates but market slips again

Bank of EnglandThe Bank of England said the fall in oil prices and slower wage growth were behind its decision to maintain borrowing costs at the record 0.5% low.

There was only a slim chance that the monetary policy committee would be tempted to hike the base rate in anticipation of a UK increase next week.

Minutes of its latest policy meeting highlighted a softening in George Osborne’s public spending cuts giving a boost to growth, but other pressures in the economy made a rate rise premature.

Sterling weakened against the US dollar and the euro.

The Bank expects CBI inflation to remain at or below 1% until well into next year, although some analysts believe it will act before than and raise rates in May.

As he has done since August, Ian McCafferty, an external member of the MPC, voted to increase rates to 0.75%. The other eight voted for no change.

London stocks recovered some ground on the Bank’s decision but were down for the sixth session in a row as Sports Direct missed market expectations. It was the worst-performing stock in percentage terms, slumping 12.8%.

That wiped some £300 million off the value of Mike Ashley’s 55.1%, 330 million-share stake held through MASH Holdings and subsidiary MASH Beta.

 

Holiday group Tui rose 4.6% as it shrugged off recent travel worries.

The FTSE100 index fell 32 points to 6,094.69 and is now down 7% this year.

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