By Sonny Hammond
Today saw the release of the BoE interest rate decision, as expected the central bank kept the rate at a record low of 0.5%. Policy makers seem to be waiting to see if a decline in inflation is for the short term or whether it may become a big threat to the UK economy.
Even though Britain saw some of the fastest growth among the World’s leading economies last year and is set for more this year, the global oil price decrease has caused inflation to take a dive.
This in turn has taken the pressure off the BoE to hike the interest rate. The outcome of this has stirred up mixed opinions from economists and officials as when the next rate hike will be, even a mention of a rate cut if inflation does not rise in the near future.
Also another aspect to take into account is the looming British elections on May the 7th, the closely fought campaign between the Labour party and the Conservatives along the high probability of a hung parliament may cause great uncertainty for the GBP thus weakening the currency considerably.