Freeze on UK interest rates continues

The Bank of England’s Monetary Policy Committee (MPC) has today elected to keep UK interest rates on hold at the record low of 0.5% - a level which has been in force since March 2009.

Furthermore there are no changes to its quantitative easing (QE) programme. In November, the Bank announced that it would pump another £25 billion into the economy under its QE programme.

The amount was in addition to the £175 billion of support already provided.

According to Vicky Redwood at Capital Economics: “The Monetary Policy Committee is likely to wait for February’s inflation report before reviewing its asset purchase programme.”

In the meantime, data published this week showed manufacturing and services sectors growing at their fastest pace in two years.

Both sets of figures are likely to boost hopes that the UK will have emerged from recession in the fourth quarter of 2009. Figures due later this month are expected to confirm this.

Britain has been lagging behind other economies and is now the last major economy that is still in recession.

Posted at 07:42PM Jan 07, 2010 by Kelly Board in The Economy  |  Comments[0]