Santander says MPC base rate decision is no surprise

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Santander says MPC base rate decision is no surprise

Mon 14th Jun 2010

Santander has exhibited no surprise at the Source: Bank of England'sMonetary Policy Committee(MPC) decision regarding the base rate.

The MPC announcement came yesterday (June 10th) and confirmed that the base rate will be held at 0.5 per cent for at least another month, with the stock of asset purchases set to be maintained at £200 billion.

Speaking in response to this news, chief economist at Santander UK Barry Naisbitt claimed that this decision was "expected".

"The Bank rate has now been held at a record low of 0.50 per cent for more than a year and last month's Inflation Report dampened the prospects of an early change," he said.

In his view, the level of inflation the UK is experiencing will have played an important role in the role in yesterday's announcement.

Mr Naisbitt stated that inflation is currently at 3.7 per cent, which he described as well above the target predicted.

However, he suggested this rate is down to "temporary factors" and claimed the Bank is hoping to see it fall to around two per cent during the current year.

Legal & General director of mortgages Ben Thompson also commented on the MPC base rate announcement, observing that it shows the UK economy is not out of the woods yet.

In his opinion, the whole situation can be summed up by the word "insecurity", even if economists cannot agree on whether inflation or deflation is more dangerous for the country.

Minutes of the MPC's meeting will be available to the public from 09:30 on Wednesday June 23rd, according to the organisation.

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