Member Article

Interest rates remain at 0.5%

Interest rates have been held at 0.5% by the Bank of England for the seventh successive month.

The Bank’s Monetary Policy Committee (MPC) also did not extend its programme of quantitative easing, a system of pumping money into the economy.

Earlier this week, Australia’s central bank raised its benchmark interest rate, the first major economy to do so since entering recession.

In August, the MPC increased the size of the quantitative easing program by £50bn to create up to £175bn on the UK’s balance sheet to try to help banks to bring lending back into the economy.

Martyn Pellew, president of the North East Chamber of Commerce (NECC), said: “We welcome the decision to keep interest rates stable to help stimulate economic demand.

“We hope that the injection of cash into the economy that has been made to date through quantitative easing will give banks the impetus to start lending again and that these combined measures will help stabilise the economy.

“The drop in value of the pound may be a good thing in moderation for exporters, but too much of a drop could do considerable damage to the economy in the long term. We look to the Bank of England and the Government to ensure this does not happen.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .