Bank of England vote to hold interest rates

The Bank of England voted unanimously to keep interest rates on hold this month, a report showed today.

The nine members of the Bank’s Monetary Policy Committee (MPC) kept rates at 4.75% amid signs that the housing market was cooling, according to minutes of the committee’s September meeting.

Members voiced concerns that the pace of UK economic growth might be “a little slower than envisaged”, although it was too soon to judge this with certainty.

They said the cooling housing market may lead to a greater risk of a correction to house price inflation.

The committee added that it may have under-estimated the potential impact this could have on consumer spending.

It also said recent labour market data had been “surprisingly weak”.

Analysts had widely expected the nine members to have reached the decision unanimously and also predicted that signs of the cooling housing market would be discussed.

The Bank has raised rates five times since last November in a bid to cool consumer spending and house price inflation.

In its August inflation report, members said that inflation would hit its 2% target in two years’ time without the need for drastic rate hikes.

This was taken into account in arriving at the rate decision, today’s MPC report showed.