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Bank of England holds interest rate

The Bank of England has kept interest rates on hold at 0.75%, after coming close to cutting rates for the first time since August 2018.

On 30 January, the Bank's Monetary Policy Committee (MPC) voted 7-2 in favour of retaining the rate for the next quarter, despite speculation a cut was in the offing.

Fears of a cut were prompted by the economy growing at its slowest rate for seven years in November 2019, according to the Office for National Statistics (ONS).

Then the UK's rate of inflation fell to its lowest rate in more than three years in December at 1.3% - way below the Bank's target of 2%.

But a revival in the housing market and a surge in jobs growth eased pressure on the Bank to lower the rate.

The decision to keep interest rates on hold in January 2020 may only serve to kick the can down the road.

The MPC determines the rate of interest on a quarterly basis, with the next decision due on 26 March 2020.

Rob Kent-Smith, head of GDP at the ONS, said:

"Overall, the economy grew slightly in the latest three months, with growth in construction pulled back by weakening services and another lacklustre performance from manufacturing.

"Long term, the economy continues to slow, with growth in the economy compared with the same time last year at its lowest since the spring of 2012."

The cut would have been bad news for people looking to put their money in savings accounts but good news for those with variable-rate mortgages, who would have had less interest to pay on their loans.

We can help you get the most out of your savings.

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