Highlights
The Bank of England left its key interest rate unchanged at 5.5 percent this morning. Analysts had been split on whether the Bank would wait until February when the next Inflation Report is due to act. Many thought the MPC would wait for firmer evidence of a slowdown even though recent survey data indicated that the important service sector was softening. Its rate remains the highest among G7 countries. Although third quarter growth was robust, recent data have indicated that the economy may be slowing faster than anticipated as a combination of past rate increases take hold and the global credit crunch shows signs of impacting key sectors of the economy such as housing. The Bank has an inflation target of 2 percent and consumer price inflation was above that level in November. Among events that have taken place since the last MPC meeting has been the sharp depreciation of sterling against both the dollar and the euro, the currency of its most important trading partner. But while money market conditions have eased substantially, a survey conducted by the Bank showed credit availability has become more restricted and is expected to get tighter still in the first quarter. Banks have balance sheets to repair and concerns about credit worthiness if the economy slows.

The Bank issued no statement with the decision. Bank watchers will have to wait until January 23 for the minutes of the meeting.

2008 Release Schedule

Released On: 1/10 2/7 3/6 4/10 5/8 6/5 7/10 8/7 9/4 10/8 11/6 12/4