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Base rate at 0.5 per cent for almost a year

Base rate at 0.5 per cent for almost a year

Category: Economy

Updated: 04/02/2010
First Published: 04/02/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The Bank of England's base rate of interest will remain at its current record low of 0.5 per cent for another month at least.

Some analysts have predicted that the measure will rise at some point in 2010, with a handful even raising the possibility of a 0.5 per cent hike in March.

However, the Monetary Policy Committee's decision for February was widely expected and means the base rate has been set at its record low for one month shy of a year.

In the meeting, it was noted that the economy has returned to growth, albeit in a sluggish manner. Other positive factors were cited, including a pick up in household spending, the easing of the decline in business investment and the increasing demand for UK exports.

However, a rise in inflation and a continuing restriction on credit meant the Committee thought only a gradual recovery was likely.

The MPC also voted to maintain the size of its £200 billion programme of quantitative easing, although it hasn't ruled out enlarging the scheme in the future.

The minutes of the meeting, which will reveal whether the MPC's decision was unanimous, will be published on Wednesday 17 February.

The next base rate decision is scheduled for Thursday 4 March.

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