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MPC holds base rate as service sector grows

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  • 08/09/2003
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The Bank of England's Monetary Policy Committee (MPC) has held the bank base rate at 3.5% for the se...

The Bank of England’s Monetary Policy Committee (MPC) has held the bank base rate at 3.5% for the second month running.

George Johns, economist at The Woolwich, said: “The MPC decision was always going to be a cut-and-dried affair, with the data over the last month being broadly positive in tone.

“Most notably, survey data last week showed that activity in the service sector – by far the largest segment of the economy, accounting for around 66% of total output – grew at its fastest rate since February 2001.”

Ray Boulger, senior technical manager at Charcol, added: “Today’s base rate freeze comes as no surprise, with concerns over consumer debt levels in the UK continuing to make the headlines and the housing market in the South showing further signs of recovery.

“The market is now factoring in a rate rise before the end of the year but, as in March this year, we think this could well be premature.”

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