The bank rate was left at 0.50% at the March meeting, marking exactly 2 years unchanged rates.

At the February meeting, 3 members of the Monetary Policy Committee voted for a rise – up from2 in January.

Everyone is waiting patiently to see the real outcome!

Will it go up or stay at the same level? People are struggling to invest – to save whatever kind of bank they are with – private bank or not it is the same pressure  – hope & despair.

Increasing rates slows down inflation – and it is the Bank’s job to keep inflation in check.

However,  it also increases the cost of borrowing and there are concerns this may tip the UK back into recession.

As well as the VAT going from 15% to 20%, the rate of inflation has also been pushed up by oil prices – a chain reaction!!

Financial planning is almost not possible for the time being.

According to Reuters, market pricing suggests a 10% chance of a rate rise this week.

So, a real stanby until a real decision is taken.

So why is there such a dilemma? The problem is that inflation is  higher than the 2% target. In January it was double that rate at 4%.

Some of the rise in inflation is a result of the rise in VAT from 17.5% to 20% at the start of the year, which the Monetary Policy Committee  could reasonably conclude “was not its problem“.

The committee may have decided to keep rates on hold this month,  that just means there will be even more pressure  on the outcome next month.

At the February meeting, three members of the Monetary Policy Committee voted for a rise – up from two in January.

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