BoE holds interest rates at 0.5%

7 December 2012

Interest rates are to remain on hold in the UK until next year, it was announced yesterday (7 December).

The Bank of England (BoE) revealed that members of its Monetary Policy Committee (MPC) have voted to maintain the country's base rate at its historically-low level of 0.5 per cent for another month.

Officials held a meeting yesterday morning to decide on the direction of the nation's fiscal policy and also opted to keep the BoE's asset-purchasing budget at £375 billion ($601 billion).

Britain's interest rate has been kept at 0.5 per cent since March 2009 as MPC members feel the country's financial system is not strong enough to cope with a higher figure as it battles against the effects of its double-dip recession.

Ross Walker, chief UK economist at the Royal Bank of Scotland (RBS), commented that the policymakers "have a bit of a balancing act at the moment" due to the fact inflation is "a little bit above its target" and is expected to remain there for several months.

By Gary Cooper

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