No change in interest rates

The base rate has remained at 0.5 percent following the September Monetary Policy Committee meeting. The Bank of England announced that the base rate would remain at its all time low for the eighteenth month in a row, which will have come as a relief to many homeowners who may have been worrying about their mortgage repayments rising.

The base rate has been at the record low of 0.5 percent since March of last year, and is at its lowest in the history of the Bank of England, which spans over three hundred years. However, there have been calls for the base rate to be increased by some officials who believe that this is necessary in order to keep a lid on inflation.

In July the level of CPI inflation stood at 3.1 percent, and this was way above the 2 percent target set by the government. Some officials and groups have said that they believe the base rate now needs to be increased to try and curb the high level of inflation.

The Bank of England also announced that it was going to continue with the Quantitative Easing programme, which was set up by the former Labour government. The scheme has already seen £200 billion ploughed into the economy, and some believe that the programme will be extended in due course.

One economist stated: “The Bank of England has held fire for another month, but we think the quantitative easing gun is about to be reloaded and the order to shoot given. Whilst above target inflation has stopped the MPC pulling the trigger on a further extension in QE this month, the economic threat from weak money supply growth looms ever larger.”