The Bank of England has kept UK interest rates at 0.5%. Not only that but the Bank also kept the size of its bond-buying stimulus programme unchanged at £375 billion. The decision comes more than six years after the record low was introduced. The Bank’s Monetary Polity Committee (MPC) made the decision.
Mortgage borrowers have benefited from lower repayments and the half-dozen years of ultra-low interest rates have cut savings’ returns. In April, ultra-low inflation turned negative to -0.1%, which has put on hold expectations about the Bank raising rates in 2015.
The Bank claimed in its quarterly inflation report last month that it was likely to raise the cost of borrowing in the middle of next year. On a different note, the recent ONS figures confirmed that the UK gross domestic product (GDP) growth slowed to 0.3% in the first quarter. This was the worst result since the end of 2012.
In all previous meetings so far this year, the nine-strong MPC has voted unanimously to keep rates on hold.