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No movement in Bank of England base rate

February 18, 2010 by admin  
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It has been announced by the Bank of England that the is to remain at its record low level of 0.5 percent once again, making this the eleventh month in a row where the base rate will have been at its lowest level in the history of the Bank of England. The decision comes just over a week after it was announced that the UK had finally joined other major economies by coming out of recession.

Most analysts had been expecting the base rate to remain static for the month of February, so the move by the central bank has come as no real surprise to most. Many industry officials believe that it could be later this year before the central bank decides to increase the base rate, and there are some industry groups that think it could even be as late as the middle of next year before the base rate starts to increase again.

It was also announced by the Bank of England that the quantitative easing scheme is not to be extended for the moment, having already been increased up to £200 billion, which has already been pumped back into the economy. However, there is a chance that more money could be pumped into the economy in the future should this be justified, with the Governor of the Bank of England stating that the situation with the economy will be carefully monitored.

One of the reasons why many people believe that the base has been kept on hold again, and is likely to continue for some time, is that the economic growth in the last quarter of 2009 was so low, coming in at just 0.1 percent. Whilst this was enough to just about pull the nation out of recession there are fears that it was not a decisive enough level of growth to ensure that the nation did not quickly fall back into recession.

Tags: interest rate, economics, inflation, bank of england, recessions, base rate, bank of england base rate

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