The Bank of England Monetary Policy Committee has kept interest rates stable at 0.5% for another month.
Governor Mark Carney said that weak first quarter output statistics had been a key factor in the decision, but was confident that positive momentum would reassert itself in time. However, the Bank cut its GDP growth forecasts for the year, to 1.4% from 1.8%
Carney was labelled an “unreliable boyfriend” at the Bank’s press conference as he continued to promise rate rises would be coming soon. Investors clearly had issues with the decision, and the pound fell against the euro and the US dollar.
While there had been hope for a rise after Carney made a statement in February, hopes had been dashed by several recent releases from Bank Officials. Consensus expectations among analysts and economists were that rates would remain stable, but patience is wearing thin with rates staying below 1% since 2009.
Commerzbank’s Peter Dixon said that markets were now expecting three 25 basis point rises over the next three years, with the first not coming until 2019.