Interest rate minutes released

The minutes from April’s monetary policy committee show that the Bank of England’s policy makers are in favour of keeping rates at the all time record low of half a percent.

The vote was recorded as being 6 to 3 in favour of keeping the current rates and holding them for now. This is the third month in a row that the same three members have voted to raise interest rates. The committee has however maintained that their view on inflation had not changed and that rates will remain the same. It is not expected that the Bank of England will increase that interest rate until august due to the risk that inflation could rise to or exceed 5%.

Two of the committee members, Mr Dale and Mr Weale voted for a raise of 25 basis points to 0.75% and Mr Sentance voted for a raise of 50 basis points to 1%. This comes after Februarys fall in the consumer price index to 4% was combined with a rise to 5.4% of the producerprice index. Mr Posen however, voted to increase the asset purchase programme by £50bn bringing the quantitative easing to a total of £250bn

Filed under: Economy

Home retail group profits down

The Home Retail Group has seen a drop in its yearly profit of just below 10%.

The group who own Argos and Homebase have posted full year profits of £265.2m which was expected as the group had posted a profit warning last month, the company has said revenue had fallen 2.8% to £5.85bn and the cash gross margin dropped 4% to £2.18bn. Last year they saw a profit of £292.9m however the DIY market that Homebase competes in has been shrinking.

A large proportion of the Home Retail Group’s business is moving in to online retail, reaching almost half of all sales in the case of Argos. Argos is all so launching a shopping channel to compete in the home buyer market.

The group have also cut the costs of distribution and operation by 3%. Share prices remain around the 200p mark with a rise of 5% in early trading.

Home Retail Group chairman Oliver Stocken said:

“Economic uncertainty and a low level of consumer confidence continue to adversely impact customer spending patterns, despite these challenges, the group continues to build on its strategic advantages to ensure that it will be well-positioned for the economic recovery over the longer term.”

Filed under: Business