News Release
Bank of England Maintains Interest Rates at 5.25%
06 May 1999
The Bank of England's Monetary Policy Committee today voted to maintain the Bank's repo rate at 5.25%.
The Committee considered how policy should be set in the light of its latest inflation projection. Since the February Inflation Report, there have been encouraging signs of recovering growth, and over the forecast period inflation is expected to be broadly in line with the 2 ½ % target. The projection takes account of the rise since February in sterling's effective exchange rate, and assumes a decline from its present high level, at least in line with interest rate differentials. If sterling were not to weaken as assumed, it is likely that inflation would undershoot the inflation target over the coming two years. In those circumstances, depending on other developments in the economy, there might, therefore, need to be further easing of interest rates in order to keep inflation on track to meet the 2 ½ % target.
The latest projections and analysis will appear in the Inflation Report to be published on Wednesday 12 May.
The minutes of the meeting will be published at 9.30am on Wednesday 19 May.
Note for Editors:
The last change in interest rates was a reduction of 0.25% to 5.25% on 8 April 1999.
