The Bank of England Monetary Policy Committee (MPC) has voted to keep interest rates at 0.5%, but the mood may be shifting to future rate rises.
“We [the MPC] are responding to things that are essentially … unpredictable,” said Broadbent this morning on BBC Radio 5’s “Wake Up To Money” programme.
“And that means that it would not just be impossible, it would be foolish to pre-announce some fixed date of interest rate changes.”
The BoE has not hiked rates in over six years and it looks like it will be a while until rates rise again. On Thursday, only one member of the Monetary Policy Committee, a BoE panel which determines the setting of rates, voted to increase interest rates to 0.75%. The remaining eight members of the MPC voted to hold the BoE’s benchmark interest rate at 0.5%.
Another member, housing economics expert David Miles was close to voting for a rate rise. On rates, Mr Miles, who attended his final MPC meeting last week, said there were arguments for starting “the journey now” towards a rate hike.
He told Bloomberg: “Sterling had gone up a bit, oil prices had fallen a bit, there were somewhat ambiguous signals from the labour market, but on balance it was a set of economic news that probably reduced at least the near-term inflation profile by a non-trivial amount.
“For me that was what made the decision ultimately one to keep policy on hold. Ian McCafferty [who voted for a rise] came out on one side of that and I was on the other side, but it wasn’t a compelling clear-cut case one way or the other for me.”
However, he said that the longer the MPC leaves rates at the current 0.5% level, the faster they may need to rise in the future.