Interest rates held at 0.5%
Interest rates held at 0.5%
Thursday 7th May 2009
The Bank of England has announced interest rates are to be held at 0.5 per cent.The bank announced that it will print more money, however, with an extra £50 billion announced in quantitative easing.
In March, the monetary policy committee started the first tranche of a £75 billion spending spree – with funds created to add a boost to the economy and counter expected deflation.
Some experts are claim interest rates could be held at 0.5 per cent for the next 12 months.
Commenting on today's interest rate decision Royal Institution of Chartered Surveyors (Rics) senior economist Brigid O'Leary said: "The Bank of England’s decision to extend their programme of quantitative easing suggests that they are still fairly pessimistic about the economic outlook and, in particular, the outlook for bank lending. It also suggests that they expect interest rates to stay low for the foreseeable future.
"So far, there has not been much evidence that quantitative easing has boosted bank lending significantly. Rics hope that increasing the size of the asset purchasing scheme will stimulate bank lending and help improve availability of mortgage finance.
"That is one vital way to allow the recent increase in buyer enquiries to translate into an increase in sales and may help to lift the housing market out of its depressed state."
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