No change for UK base rate

After a series of six base rate cuts between October of last year and March of this year, the Bank of England has decided to keep the base interest rate on hold following the latest Monetary Policy Committee meeting. March saw the base rate fall to an all time low of 0.5 percent, and following the April meeting the MPC has decided to keep the rate at 0.5 percent.

The move was widely expected by most analysts and economists, who were already predicting that the central bank would keep rates on hold and focus instead on quantative easing to try and get the economy back on its feet. This is the first time in seven months that the base rate has not been cut.

One economist said: ‘QE is clearly now at the forefront of the Bank of England’s attempts to stimulate economic recovery, not only because Bank rate has fallen as low as it can effectively go, but also because the lack of availability of credit is a serious threat to recovery prospects.’

It is likely that the central bank will now keep the base rate on hold for the remainder of this year, according to expert opinions. The plan now is to try and plough money through quantative easing into the economy, with up to £150 billion already put aside for this process.