Bank Of England Leaves Interest Rate Unchanged

(RTTNews) - The Bank of England decided to leave its benchmark rate unchanged on Thursday as inflation is expected to continue rising and the economy is forecast to stagnate in the fourth quarter.

The Monetary Policy Committee voted 6-3 to hold the bank rate at 4.75 percent. Three members preferred a quarter-point reduction.

The bank had reduced the rate by quarter-point each in November and August.

"A gradual approach to removing monetary policy restraint remained appropriate," the bank said. Bank staff expects GDP growth to have been weaker at the end of the year than projected earlier. The economy is forecast to post zero growth in the fourth quarter compared to 0.3 percent estimated in the November report.

In the near term, headline inflation was expected to continue to rise slightly. Inflation, wage growth and some indicators of inflation expectations increased, adding to the risk of inflation persistence, the bank said.