Commentary on MPC rate decision

Rate setters waiting for the Budget; Kevin Brown, savings specialist at Scottish Friendly, comments on the MPC’s latest rate decision:

“As expected the Monetary Policy Committee (MPC) has allotted to hold rates where they are for now. With a mixed economic picture, between quiescent inflation, growing real wages and flatlining GDP, the rate setters have clearly opted to wait and see until we have more clarity later this year.

“This clarity is likely to emerge from the content of the Government’s upcoming Budget at the end of October, and once the dynamics of winter and energy prices are clearer. Households too will be eyeing developments and potential changes that will affect their finances.

“All this to be said, it doesn’t help with the uncertainty households will be feeling about the situation. With wages catching up, it’s important for families to ensure they have rainy day funds wherever possible to protect their personal finances against any kind of shock.

“Although rates have been held today, the cash savings market is steadily deteriorating. This means for long-term savings people may want to consider looking beyond cash for their long-term growth prospects.”