Bank of England interest rates 'to stay at 0.5% in 2010'

Posted: 07 Oct 2009 13:41:33 GMT

It has been suggested that the Bank of England interest rates will remain at 0.5 per cent throughout 2010.

Benjamin Williamson, economist at the Centre for Economic and Business Research consultancy, said that there are a number of reasons why his organisation thinks the Bank's monetary policy committee (MPC) will keep the rate unchanged.

"[It is] partly to counteract the expected sharp fiscal contraction, but also because the recovery does remain weak, so they have got to keep borrowing costs down," he explained.

He emphasised his point by claiming that it is "extremely unlikely" that the UK will encounter any movement in the cost of borrowing throughout the 12-month period.

The MPC brought interest rates down to their current record low level in March this year and they have been frozen at 0.5 per cent in the six months since.

Homeowners on some tracker mortgages have been able to benefit from reduced monthly home loan payments as a result of this monetary policy.


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