Bank Holds Interest Rates At 0.5%

• News
• Published: 04 Feb 2010 in Money and Mortgages

Further economy-boosting measures have been put on hold after the Bank of England opted not to extend its quantitative easing scheme.

The Bank has so far pumped £200 billion in newly-created money into the economy after finishing its latest round of assistance last week.

Today's wait-and-see approach from policymakers also saw interest rates held at 0.5% - continuing almost a year of record low borrowing costs.

Experts had widely predicted a no-change position from the nine-strong Monetary Policy Committee (MPC) after a surprisingly weak climb out of recession in the final quarter of last year tested resolve.

The UK's longest period of decline ended with growth of just 0.1% in the last three months of 2009, leading to fears of a so-called "double dip" recession.

As a result, some economists predict that the Bank will keep the door open to more QE if the economy continues to struggle.

Howard Archer, of IHS Global Insight, said: "The eventual increases in interest rates are likely to be limited to counter the restrictive impact of the tight fiscal policy that will increasingly have to be enacted from 2011/12 to rein in the bloated public finances."