Interest rates held yet again

Thursday 6th August 2009

The Bank of England has decided to hold interest rates at 0.5 per cent for yet another month.

Rates have been held at the same level for six months in a row now this year and currently stand at the lowest in 315 years.

Financial analysts predict the Bank could hold rates at the same level for the remainder of the year and potentially into 2010.

The Bank announced today, however, that it is to raise its quantitative easing programme by £50 billion, bringing the total to £175 billion.

The £125 billion spent so far has been pumped into the economy to encourage lending.

To extend the programme beyond the £150 billion limit set by chancellor Alistair Darling, the Bank will have to seek the permission of the Treasury.

Britain's GDP contracted by a further 0.8 per cent quarter-on-quarter during the second quarter of this year, following a 2.4 per cent contraction in the first, and 1.8 per cent in the final quarter of 2008.

Unemployment is also continuing to rise, with expecting it to hit three million by next year. ADNFCR-1783-ID-19298177-ADNFCR

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