Bank keep UK Interest rates at all time low of 0.5%

The Bank of England (BoE) again today decided to keep UK interest rates at their record low of 0.5%.

The Monetary Policy Committe has kept rates at this low level continuously since March 2009, and it was widely expected that it would do so again this month.

This was heavily to do with the continued subdued economy with GDP figures only showing  a tony 0.2% growth.

“Unchanged interest rates were always a nailed-on certainty”, said Howard Archer, chief UK economist at IHS Global Insight.

The Banks’ programme of quantaitative easing (or Asset Purchase Programme) was also kept at £200bn.

The overall forecast still seems to be that the Bank will increase from this record low, yet the timing is off much speculation. Some forcasters have predicted there will be no rate change until 2013.

“There is a certain amount of inflationary inertia in the UK. The Bank of England has explained it often in terms of one-off shocks, but at the end of the day these one-off shocks keep materialising, such as higher utility bills this year,” said Sean Malony a bond strategist at Nomura