RSM responds to Bank of England interest rate decision

Rob Donaldson, Partner and head of corporate finance at leading tax, audit and consulting firm RSM, comments:

'It's no surprise to see the Bank of England (BoE) remain in a holding pattern. Our view based on the core middle market businesses we represent is that the economy continues to hover just above stall speed and the risks of a premature tightening probably, for the moment, outweigh the risks of inflation expectations spiralling.

'It is clear from the small print that the Monetary Policy Committee (MPC) is concerned over the medium term and markets have been well prepared for the eventual withdrawal of extraordinary monetary measures (QE) and for Bank Rate, very slowly, to begin to return towards more normal levels (although we would estimate the new normal has shifted to 2-3 per cent). However, that date with normality has been postponed in the interests of keeping the economy in the air whilst the inevitable uncertainties around how the Brexit and related political turmoil develop. Despite the noise (not just from the BoE) of the need to exit from post-crash monetary measures we see change being slow, uncertain and gradual - not unlike economic growth.'