Interest rates held at 0.5% for a 3rd month

The Bank of England has announced that interest rates are to be kept at 0.5% for the time being, only the 3rd month that the rate hasn’t changed since last September. This stall in changing the interest rates highlights how highly the Bank of England is prioritising its attempts to encourage banks to start lending again, therefore boosting credit and raising the ‘nominal spending’ (the cash value of spending) in the economy. The Bank of England has not injected any fresh money into the economy this month, but it is predicted that £125bn will have been spent on the quantitative easing process by the end of July. A closely-watched survey on the service sector released earlier this week suggested that the recovery may be coming faster than expected. Similarly, the European Central Bank (ECB) has kept its interest rates in the eurozone (i.e. those countries who use the Euro) at a record low of 1% for the 2nd month in a row, after it was cut from 1.25% last month, its 7th cut since last October, in an attempt to help restore economic growth in the eurozone.