Should Bank of England's MPC hold interest rates?

The Bank of England’s Monetary Policy Committee are to meet later this week to discuss the current interest rates, and the MPC are being urged to hold the interest rates at 5% in the hope that it will help to fight of a recession.

It was thought by many that last month the MPC would have increased interest rates however; they stuck to their guns and the rate remained the same.

The Bank of England’s Monetary Policy Committee consists of nine members, many experts believe that these nine members will vote three ways, one third will vote for a cut, another third wanting a rise while the final third voting for no change.

Steve Radley who is the chief economist at the Engineering Employers’ Federation, has said that interest rates should be kept at 5%, even with consumer confidence lower than it has been in years due to rising fuel and food costs, as well as house prices losing their value.

Radley believes that the slowing economy along with wage moderation should be the perfect way to prevent inflation however; if the economy keeps going in the same path, then the Bank of England will have no choice but to cut interest rates.

The Monetary Policy Committee has a tough decision ahead, but one thing is certain, if they were to increase interest rates this could be devastating to our economy.

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