Base Rate To Remain at 0.5%

The Bank of England has announced that the base rate will be held at 0.5%, making this it’s 39th consecutive month at the historically low rate.

The decision is good news for mortgage holders who have rates linked to the base rate.  Savers, however, will continue to suffer, with low returns on their money at a time when high inflation is reducing the value of their deposits.

In February 2012, during the last round of quantitative easing (QE), the Bank of England pushed a further £50 billion into the economy.  This increased the QE programme from £275 billion to £325 billion, despite the risk of triggering a rise in inflation.  

The Bank of England have announced that they will not inject more money into the financial system through QE at this time, and will instead keep it’s programme of QE at £325bn.  This comes despite calls from Monetary Policy Committee member David Miles, who argued for a further increase of 25bn, but was outvoted, 8 to 1.