July 12, 2024

ACCA Reacts to Bank Of England’s Decision to Hold Interest Rates

England, london, bank of england. banks in great britain

The Bank of England had today announced that instead of increasing interest rates, it will hold them at the current level.

The announcement has been generally well received by finance professionals, but many have expressed concern that investments remain stifled.

Lloyd Powell head of ACCA Cymru/ Wales, said:

Our Welsh members and the businesses they support will welcome today’s decision to hold interest rates at their current level.  In Wales our members tell us that despite the recent reduction in the rate of inflation, they are still seeing negative impacts on businesses and a hold on investment, which puts the brakes on potential growth in the country. The UK Government needs to work with the Bank of England and the Senedd to do more to encourage businesses to invest and grow.

 

Jonathan Ashworth, Chief Economist ACCA, added:

Yesterday’s better than expected inflation data made today’s decision a close call, but it is still a bit of a surprise that the Monetary Policy Committee sat on their hands. The committee was split, with five members voting to keep rates on hold, and four opting for a quarter point hike. Signs of loosening in the labour market and deteriorating growth, as well as some positive developments on the inflation front, persuaded the majority to remain on hold. In my opinion, the risk remains that some further monetary tightening may still be needed in the future.