Bank of England keeps rates at 0.5%

by Richard Kilner

Story link: Bank of England keeps rates at 0.5%

The Bank of England’s Monetary Policy Committee (MPC) has announced today that the British interest rate is the be left unchanged at 0.5%.

The MPC has also declared that the quantitative easing asset purchase scheme (effectively printing money) will not be increased, at this time, from its present £200bn scale.

Interest rates have now been held at their historic low for a year and a half, with the decision announced today widely anticipated.

Speculation has begun to arise regarding the possibility of increasing rates to combat persistently high inflation, but with the state of the economy still weak and the impending spending review the likelihood was that rates would remain unchanged.

The decision not to increase or decrease rates follows similar moves by the central banks of Japan, Australia and the eurozone, which also has a record low interest rate (of 1%).