The decision was widely expected as previous speeches from Governor Mark Carney signaled the benchmark rate will start rise only by the spring of 2015. However, in the previous two MPC meetings, two members voted for a rate hike.
Most recent data suggest the strong economic recovery may be slowing down. Although GDP growth accelerated for the second consecutive quarter in the April to June period, expanding by 0.9 percent, annual inflation rate slowed for the second consecutive month to 1.5 percent in August, remaining below the central bank’s 2 percent target for the eight straight month. Meanwhile, unemployment rate continued to fall to 6.2 percent in the three months to July of 2014, but employment increased at its slowest pace in more than a year.
The latest Halifax House Price Index data showed a slowdown in house prices. Year-on-year, property prices rose 9.6 percent in the three months to September, similar to August (9.7 percent) and lower than July’s 10.2 percent.
The previous change in the bank rate was a reduction of 0.5 percentage points to 0.5 percent on 5 March 2009.