Regular readers will know that I analyse the latest economic news and data and give you a monthly insight into when interest rates might rise.
These posts are very popular as you will probably see if you glance at today's 'most read articles box' on the right hand side of this page. I usually refrain from writing interest rate predictions and news outside of those articles but I will make an exception this time.
The minutes from August's monthly MPC committee meeting (the MPC are the 9 guys who set the UK bank base rate) have been released. It is only once the minutes from each MPC meeting are released do we know how the committee voted and perhaps gain an insight into how they might vote in the future. And it transpires that the committee voted during August's meeting to unanimously (9-0) keep rates on hold. What is perhaps more significant is that the last time this happened was way back in May 2010.
In recent meetings the voting split has been as low as 6-3 in favour of holding rates. But with a change in personnel (Andre Sentance, who was for a rate rise, was replaced by Ben Broadbent, who favours holding rates) and poor economic data the MPC's voting pattern has shifted towards holding rates at record lows.
Mervyn King, the Governor of the Bank of England who also sits on the MPC, stated in his recent Inflation Report that the economy has continued to weaken. If you add in his expectation for inflation to fall next year (despite it recently rising to 4.4% in July) then there is less reason to push rates up imminently (one way to combat high inflation is to increase interest rates). Also if you factor in the latest implosions in European growth figures as well as today's increasing UK unemployment figures the outlook is relatively bleak.
Unsurprisingly economists and markets are now predicting that interests may stay at 0.5% well into 2013 and possibly 2014. That's great news for mortgage borrowers but bad news for savers. But to put this into perspective, the very same economists, along with the wider market (but not me), were predicting that rates would rise in May when this looked likely. Clearly they got that wrong! So the situation could clearly change at a drop of a hat.
Just keep an eye on my Latest Interest Rate Predictions for the latest on interest rates. Or better still sign up to my newsletter to get all my articles and analysis delivered to your inbox every fortnight.