Bank of England interest rates 'will not rise until late 2011'

Posted: 12 Jan 2010 10:25:31 GMT

Bank of England interest rates will not rise until the latter part of 2011, in the opinion of one finance expert.

Alan Clarke, UK economist at BNP Paribas, says: "During 2011 GDP (gross domestic product) will be very sluggish, we will be in a soft patch and I think inflation will be very low."

He argues that these factors will support the bank maintaining low interest rates for 2010 and much of the following year.

According to the economist, the Bank of England will not change its mind and raise rates just because a positive GDP is seen.

Roger Bootle, economic adviser to Deloitte, echoes Mr Clarke's comments predicting that interest rates will remain at below one per cent for the next five years.

Last week (January 7th), the Bank of England Monetary Policy Committee voted to maintain the current 0.5 per cent interest rate.

The last time this rate changed was in March 2009 when the rate was reduced from one per cent to its present figure.

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