Bank Rate UK was set at 5.25% and it was decided that by the MPC or Monetary Policy Committee of the Bank of England. The country has witnessed 3 reductions in the bank rate in quick succession. It was also observed that there was a growth of 0.6% in the penultimate 3 months of 2007.
Nevertheless, consumer spending subsided during this period.Decisions pertaining to the settlement of bank rate UK were entrusted to the Bank of England or BOE way back in the year 1997.
It has been observed that United Kingdom has witnessed hike in interest rates five times in the year 2006. However, inflation has always loomed large on the United Kingdom economy.
Bank Rate UK and �Monetary Dosage�:
As of March 6 th 2008, the MPC or the Monetary Policy Committee of the Bank of England decided to freeze the rate of interest to 5.25%. After sensing the pulse of the economy, this monetary dosage was decided upon. Economists are of the opinion that there are chances that the economy may become sluggish especially during a period when inflation is permeating the different sectors of the economy.
Bank Rate UK registered three cuts in a row:
Bank Rate UK was reduced from 5.5% in the month of February 2008. This was the third time that the interest rates had been shed in 3 months. However, people have heaved a sigh of relief because the bank rate cuts in UK have not been as hard as in the United States of America, where the bank rate was reduced to 3% from 5.25%.
Bank Rate UK and Manufacturing sector of the UK economy:
As per reports furnished by CIPS or Chartered Institute of Purchasing and Supply, the manufactured product costs increased most rapidly. It was found that the manufacturing sector had the highest �output price index� ever since the commencement of a survey in the year 1999.
As per reports, the concluding 3 months of the year 2007 registered a 0.6% growth in the economy of United Kingdom. However, it was also observed during the same period that there was a sharp decline in consumer spending.
Mortgage Market in United Kingdom:
Halifax is recognized as the biggest lender in the mortgage market. As per reports furnished by them, price of houses have also declined over the months.
Last Updated on : 30th July 2013