Bank of England maintains interest rates at historic low of 0.5pc

Published 09th Dec 2010

The Bank of England has kept interest rates on hold at 0.5 per cent for the 20th month consecutive month.

Its Monetary Policy Committee held rates at their historic low as policymakers maintained the quantitative easing (QE) programme at its £200billion level.

Higher-than-expected third-quarter gross domestic product of 0.8 per cent, along with a strong performance in the manufacturing sector in recent months, seems to have eased pressure on the Bank, despite expectations of a slowdown in the pace of recovery in the coming months.

Earlier this week, official manufacturing figures showed a 0.6 per cent month-on-month increase in October’s output - the best reading since March and double expectations in the market.

But hopes for a private sector-led recovery were dealt a blow on Thursday as the UK’s net trade, the difference between exports and imports, widened unexpectedly.

And inflation has stayed well above the Bank’s target of 2 per cent, rising to 3.2 per cent in November. The high figure has prompted calls for a quarter-point increase in interest rates.

Source: ' ThisIsMoney '

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