The Monetary Policy Committee have voted to keep interest rates at their record low of 0.5%, by a majority of 8-1 with Ian McCafferty dissenting.

The decision marks the 78th consecutive month of record-low interest rates

Carney maintains plans for “gently rising rates” and said that the time for a rate hike was “drawing closer, but cannot be predicted in advance”.

CPI inflation fell back to zero in June, with the report stating that three quarters of deviation from target was due to low contributions from energy and food sectors.

The report continued that private domestic demand expected to remain robustt, with household spending up and an increase in wage growth. Carney stated that consumer confidence at the highest level in a decade.

The Bank of England remains supportive of bank lending, and business investment remains a key area of aggregate demand. There is “little evidence of deflationary mindset”, according to Mark Carney.

The MPC ended the report by saying that they expect to reach their target level of inflation within the next two years.

 

Miranda Wadham on 06/08/2015