Despite the prospect of recession and the need to give the economy a boost the MPC has, as widely expected, left the base rate unchanged. Presumably this is to fulfil its remit of keeping inflation at or below 2% rather than looking at the economy as a whole.
However there is now a feeling generally that with a potentially prolonged recession looming, that interest rate policy will be eased, and rates should start heading downwards before the end of this year. Indeed the recent OECD forecasts showed inflationary pressures easing, which would give the MPC scope to cut rates without going outside its current remit.
