Bank of England Statement on Interest Rate Reduction
Date of meeting: 5 & 6 February 2003
Decision: Reduced by 0.25% to 3.75%
For: The Governor, Mervyn King, Christopher Allsopp, Kate Barker, Charles Bean, Marian Bell and Stephen Nickell
Against: Andrew Large and Paul Tucker preferring to maintain the repo rate at 4.0%
The Bank of England's Monetary Policy Committee today (6th February) voted to reduce the Bank's repo rate by 0.25% to 3.75%.
The Committee reviewed monetary and economic developments in the light of its latest quarterly projections for output and inflation, to be published in the February Inflation Report.
RPIX inflation has, as expected, moved a little above target, but this is the result of temporarily large contributions from petrol prices and from housing depreciation. These influences on inflation will persist for some time but are expected to unwind further ahead.
Over the next two years, the prospects for demand, both globally and domestically, are somewhat weaker than previously anticipated. In order to keep inflation on track to meet the target over the medium term, the Committee judged that it was necessary to reduce interest rates by 0.25%.