Bank of England to hold rates steady until 2016

The Bank of England will not raise rates in 2015, despite a recovering economy, according to markets after the latest BoE monthly meeting. The BoE last cut cash rates to 0.5% in 2009 after the GFC and it has left them steady since. Only 1 of its 9 policymakers voted for an increase at last week’s meeting, surprising markets that had tipped at least 2 or 3 to opt for a rate rise. A rate specialist from Societe Generale, Jason Simpson, said “The message is clear: rates need to rise. Not yet, but they need to go up and every inflation report is one step closer to that.” The governor of the BoE, Mark Carney, said the Bank was getting closer to taking the first step to undo its stimulus for the UK economy. “The likely timing of the first Bank Rate increase is drawing closer,” he told reporters. “However the exact timing of the first move cannot be predicted in advance … in short, it will be data-dependent.”