The Bank of England Monetary Policy Committee kept interest rates at the record low of 0.5% today a decision which had been expected.
Experts are expecting no interest rate rises any time soon, and certainly not as the economy continues to recover. The record low 0.5% rates have been in place since March 2009.
Even though the UK has recently seen an inflationary increase from 3% in February to 3.4% in March 2010 experts still believe that interest rates will be kept on hold to boost the recovering UK economy.
It was in the final quarter of 2009 that the UK officially moved out of recession with growth of 0.4% and the economy grew by 0.2% in the first quarter of 2010.
Chief Economist at the British Chambers of Commerce, David Kern said: “Given the dangers still facing the economy, the [Bank's] Monetary Policy Committee must persevere with expansionary policies.”
“Any thought of raising interest rates, and withdrawing the QE stimulus, must be rejected until there is more conclusive evidence that growth is secure.”
Craig Gedey Marketing Manager at Debt Advisory Line said: ‘keeping interest rates on hold yesterday was a good decision considering the ongoing issues surrounding the results of the general election last week.’
Experts are predicting that interest rates will be kept low to compensate for the new government’s spending cuts, which cannot be avoided to tackle the budget deficit.
‘Unfortunately low interest rates don’t really help people already struggling with debt problems as they may have missed payments and incurred charges.’
‘Taking control of your debts and perhaps speaking to a debt management company to understand how they can help you is a good starting point. At Debt Advisory Line we offer debt advice on all debt solutions available to people living in the UK.’