2014.08.0806:49:26UTC+00No rate change for Bank of England

The Bank of England has opted to keep interest rates at their historic lows and save any major changes for a later date.

During their most recent August meeting, policy makers kept rates where they have been since March 2009 at 0.5% alongside holding on to gilts earned through their quantitative easing program in the amount of £375 billion. The central bank announced that it will keep the funds until such time interest rates are hiked up.

Recent economic data have painted a positive picture of Britain’s recovery which has spurred speculation that the BoE will soon raise rates. Last month, positions taken by policy makers regarding rate hikes were described as becoming “more balanced” with two members voting for an increase of 0.25% making analysts wonder whether more committee members have shown their approval during August’s meeting. The official minutes of the discussions will be released in two weeks’ time.

Next in line is the release of the Bank of England’s quarterly report on inflation which will also include its latest economic assessment. Economists believe that the BoE has started to give more importance to wage growth and are awaiting its comments on its current weakness despite improvements in the labor market. Investec’s economist Victoria Clarke says that although “momentum is largely blowing in the direction of tighter policy, one change in the wind could come from pay growth”. Should the central bank confirm the weight of wage growth on its decision making, Clarke claims it could delay when the first hikes will happen.