A higher increase in consumer demand - both in the UK and in the eurozone - than anticipated was one...
A higher increase in consumer demand - both in the UK and in the eurozone - than anticipated was one of the reasons the base rate remained unchanged at the beginning of June.
This comes as the Bank of England's Monetary Policy Committee report released Wednesday, revealed that six members out of nine voted in favour of leaving interest rates unchanged.
Judging by the report, one of the main reasons behind the decision to keep the base rate at 3.75% was that UK consumption growth was slowing less rapidly than had first been expected.
But this was not the only reason for 'freezing' the rate as the housing market also influenced the committee's decision.
Even though it is clearly slowing, the committee said, this "faster-than-expected" pace of house price inflation reduced the likelihood that there would be an abrupt price correction in the housing market.
The anticipated 0.5% drop in the key European interest rate to 2.0% on 5 June also seemed to have played a part in the BOE's decision.
Moreover, the committee also said a reduction in interest rates risked adding unnecessary vulnerability to households, by encouraging a rapid further accumulation of debt.
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Via The Exchange
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