/24-7PressRelease/ - LONDON, UK, March 25, 2008 - Although two members of the rate-setting MPC had voted for an immediate cut of a quarter of a percentage point, they were outvoted by the other seven. Majority of MPC members suggested the committee needed to maintain its focus on inflation. The MPC cut interest rates in February from 5.5% to 5.25% to help ease economic fears.
Most MPC members were concerned that to follow February's rate cut so quickly with another reduction may give the wrong signal to the financial market. They were apprehending that back-to-back reductions might lead observers to think that the committee was focusing more on downside risks to demand at the expense of the medium-term outlook for inflation.
The Bank of England has cut rates in response to signs that the global economy may be struggling as a result of the credit squeeze and the bad US mortgage debt market. February's rate cut was the third from the MPC in last six months, with the previous reduction coming in December last year. The US Federal Reserve has moved much further, and interest rates prevailing there are now at 2.25% following six cuts since mid-September, including two reductions in January.
The two MPC members who advocated for a rate cut were deputy governor John Gieve and David Blanchflower. Mr Gieve is in charge of financial stability, and came under fire at the Treasury Select Committee hearings for his role in the Northern Rock scandal.
For additional information on the news that is the subject of this release (or for a sample, copy or demo), contact Webmaster or visit http://www.shakespearefinance.co.uk/
# # #
Read more Press Releases from Gracy Bonsu:Other Press Release Headlines:
