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Businesses buoyed by base rate decision

Bank of England

Financial firms appear pleased that the Bank of England opted to leave interest rates unchanged at 0.75%.

Yesterday the Monetary Policy Committee voted 7-2 to keep rates on hold, which has been taken as an endorsement of the state of the economy.

Giles Coghlan, chief currency analyst at HYCM, said: “In many ways, the decision to leave interest rates at 0.75% is welcoming news.

“It also means that interest rates could rise in the coming months should the so-called ‘Boris bounce’ continue and confidence in the UK economy return.

“More generally, today’s announcement shows the Bank of England is erring on the side of caution – while the UK economy is in a stable position, there are still many unknowns on the horizon which could drastically impact investors, businesses and consumers. Brexit, of course, is chief among them.”

Jerald Solis, director at London property investment service Experience Invest, said: “The Bank of England is cautiously optimistic about the future growth prospects of the economy, even with Brexit on the horizon.

“With interest rates hovering below 1% for over a decade now, the question on everybody’s minds is how long it will be before the Bank of England is prepared to increase the rate of interest to a whole percentage.”

Paresh Raja, chief executive at bridging lender Market Financial Solutions, said: “Investor confidence is returning, and we are likely to see the markets post a modest performance in the aftermath of this announcement.”

Despite the positive reaction, outgoing Bank of England Governor Mark Carney called for caution.

He said: “Although the global economy looks to be recovering, caution is warranted. Evidence of a pick-up in growth is not yet widespread.

“And any one of the known risks, such as a renewal of trade tensions, could reverse recent progress.

“The emerging threat from a new strain of coronavirus is a reminder of the need to be vigilant.”