Santander banking predicts base rate will stay low 'for some time'

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Santander banking predicts base rate will stay low 'for some time'

Following the Monetary Policy Committee's (MPC's) decision to hold the base rate at 0.5 per cent, Santander banking has forecast that the situation could stay this way for a while yet.

Chief economist at the firm Barry Naisbitt noted that the rate has been held at the current level for more than a year now, but it was widely expected to remain unchanged this month.

In his opinion, the base rate could stay at 0.5 per cent "for some time", due to the state of the economy.

However, he added: "As the economic recovery builds, the argument for starting to normalise rates is likely to become stronger, especially to prevent inflation expectations rising."

Mr Naisbitt revealed that it will be interesting to see the MPC minutes when they are released on Wednesday July 21st, since they will show how many people voted to increase the base rate.

He highlighted how one member of the committee called for the rate to be raised at last month's meeting.

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