BoE maintains interest rate

Date: 5th February 2010

The historically-low interest rate of 0.5 per cent is to remain in place following an announcement from the Bank of England.

A statement from the Bank's Monetary Policy Committee (MPC), released yesterday (February 4th), confirmed that the rate would remain unchanged for the 11th consecutive month.

The MPC also announced that the Bank is to maintain its £200 billion Asset Purchase Programme.

Ian McCafferty, chief economic adviser at the Confederation of British Industry, said the move was "unsurprising" but said he expected the rate to increase later this year.

"It is unsurprising that the Bank has kept interest rates and its quantitative easing (QE) policy at the same levels. The situation is finely balanced," he said.

The expert explained that despite some stability in the economy, there is still some way to go.

"The economy is stabilising but still faces some serious headwinds, and recovery remains shallow-rooted.

"However, near-zero interest rates, the existing £200bn QE package and the sharp fall in Sterling are already extremely expansionary, and inflation has exceeded expectations consistently in recent months," he added.