MPC holds interest rates at 5.25%

The last change in interest rates occurred on 11 January when the MPC unexpectedly decided to raise it by 0.25%, catching many in the industry unawares as a rise in the base rate was not expected so close to the previous increase in November 2006. The City was last month caught off-guard when it was revealed one member of the nine-strong committee wanted a cut in interest rates to 5%, while the remainder of the MPC wanted to keep rates steady. At the meeting in March, David Blanchflower had argued a cut was possible as there was considerable evidence of spare capacity in the labour ma...