2017.12.1423:27:00UTC+00BoE Keeps Rates on Hold in Unanimous Vote

The Bank of England left the key interest rate at 0.5 percent in a unanimous 9-0 vote among policymakers.

The central bank affirmed its view that “further modest” interest rate hikes are likely to be a necessity to drive down inflation to its 2 percent target over the next few years.

In the minutes published of its December Monetary Policy Committee released on Thursday, the members showed that they were not worried regarding the consumer prices' rise to 3.1 percent in November, with all members voting for no change in interest rate and no change to the central bank's quantitative easing process.

The absence of any rhetoric on the path of interest rate projected by financial markets indicates that policymakers is content with expectations that the regulator will tighten policy by up to two times in 2018, the first one seen to be in May and the other potentially happening towards the end of 2018.

If BoE follows the said path, it would bring the benchmark interest rates up from the current 0.5 percent towards 1 percent by the end of the following year. Though this would mean that borrowing will become more expensive, the rate would still be a historically low level of interest rates and would still entice households and enterprises to borrow and spend.