Financial News

  • 7 February 2014, 13:37

Base Rate Held At 0.5% By Bank Of England

The Bank of England (BoE) has confirmed it will hold the base rate at the historic low level of 0.5%.

The rate has now remained unchanged since 2009.

Its Monetary Policy Committee (MPC) also said that the quantitative easing liquidity programme would stay at the current 375bn.

The MPC has been developing a new plan as Britain's economic recovery increases at a pace above previous expectations.

As unemployment continues to fall towards the 7% level, the bank and governor Mark Carney have been forced to stress there is no rush for a rate rise.

The latest unemployment figure has been recorded at 7.1%. Inflation has also dropped to the target figure of 2%.

Rising base rates have a knock-on effect for new and variable home mortgage interest rates.

Analysts now expect the BoE to give partial new guidance on future strategy next week, when it publishes a quarterly economic outlook.

New indicators, such as wage growth, may be added to unemployment rates to help guide any change.

Growth in 2014 has continued the trend from last year.

Recent data and surveys have shown strengthening in both property and motor vehicle sectors.

Meanwhile, the European Central Bank has also kept rates unchanged, holding off policy action as it waits for eurozone deflationary threat forecasts.

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