Governor's last meeting

Bank holds interest rate as virus spreads fear of slowdown

Bank of England

Verdict awaited from Bank of England (pic: Terry Murden)

The Bank of England voted to hold the interest rate at its current 0.75% amid growing fears that the coronavirus will prompt a global slowdown.

Economists were divided on the merits of a cut and there had been considerable speculation that even if the Bank of England did not cut interest rate to 0.5% this time, more MPC members would favour looser monetary policy.

However, the vote was 7:2, as had been the case in December. No MPC member felt compelled to join Michael Saunders and Jonathan Haskel for an immediate interest rate cut.

This was despite some recent dovish comments earlier in January by MPC members Silvana Tenreyro, Gertjan Vlieghe and Mark Carney indicating that they could favour a near-term interest rate cut if the economy failed to quickly show improvement after the election. 

The rate-setting monetary policy committee also noted that global growth had appeared to stabilise and that there had been a reduction in trade tensions.

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