Base rate to stay on hold 'until 2016'
The Centre for Economics and Business Research (CEBR) now expects the Bank of England to keep base rate on hold at 0.5% until January 2016Â - at the earliest - according to a story in The Sunday Times.
If the prediction is correct, it would be the longest time the Bank of England base rate has stayed the same since the 1940s, when it remained at 2% for 12 years, between 1939 and 1951. CEBR previously predicted base rate would rise in 2013.
Scott Corfe, from CEBR is quoted as saying: “Our view is that there will need to be cuts in public spending for at least two parliaments because of the challenge the government faces in reducing the deficit.
"The Bank will need to provide ongoing support to the economy through ultra-low interest rates and more quantitative easing."
There are more than 7million home-owners on variable-rate mortgages linked to the Bank rate.
20 January 2012
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