Bank holds base rate at 0.5%

by Aaron Strutt

Oct 08 2010

The Bank of England have held interest rates at 0.5% for the 20th consecutive month. It has also decided not to pump any more money in to the economy through its quantitative easing (QE) program.

Aaron Strutt, a broker at Trinity Financial Group, says: "The recent positive gross domestic product figures will have been taken in to consideration by the Monetary Policy Committee, but it is still very early to think that the economy is fully on the road to recovery and it will not need any further help. There are still a huge amount of public sector working set to lose their job over the next few years which will have big consequences for the private sector. It would be a dangerous time to raise interest rates as many homeowners are still struggling to pay their mortgages."

The Eurozone has also kept interest rates on hold at a record low of 1% for the 18th month in a row. On Wednesday the US Federal Reserve announced that it would pump a further 600 billion dollars (£373 billion) into the US economy in a second round of QE.

November 4, 2010