BoE Split 8-1 On Rate; Cuts Inflation, GDP Forecasts

(RTTNews) - Policymakers of the Bank of England decided to hold its key interest rate at a record low again in a split vote and also downgraded its economic growth and inflation forecasts.

The Monetary Policy Committee headed by Mark Carney voted 8-1 to hold the interest rate at 0.50 percent, the bank said in a statement on Thursday.

At the November meeting, Ian McCafferty sought an increase in the Bank Rate by 25 basis points, as seen in August, September and October.

Policymakers voted unanimously to maintain quantitative easing at GBP 375 billion.

Output growth is expected to be at 0.6 percent in the fourth quarter, the bank said in its quarterly Inflation Report. Going forward, growth is forecast to remain at around this rate.

The bank expects the economy to grow 2.7 percent this year and 2.5 percent in 2016. Then the growth is projected to improve to 2.7 percent in 2017.

In the August report, the bank had projected 2.8 percent growth for 2015 and 2.6 percent next year.

Inflation is projected to pick up over coming months, but less quickly than projected in August, BoE noted. The central bank estimated CPI inflation to rise to 0.4 percent in December, and to 0.7 percent in March 2016.

Inflation is expected to return to the 2 percent target in around two years.