He has kept to his promise of cutting rates as quickly as he would raise them. Growth slowing The MPC will have looked closely at recent gloomy economic data before making its decision. The latest GDP figures show the UK economy is slowing sharply. Some analysts predict that it will slide into negative growth this year. The manufacturing sector has been in recession for sometime but has shown signs of levelling out.
Consumer demand is a key determinant of the health of the overall economy.
The MPC said last year that wage increases were the biggest factor standing in the way of interest rate falls because they boost inflationary pressures. However, the publication of earnings figures was suspended in November over doubts about their accuracy, depriving rate setters of important data in this area. The BBC is not responsible for the content of external internet sites.