Interest rates held at 0.5% for a 5th month

The Bank of England has announced that interest rates are to be kept at 0.5% for the time being, only the 5th 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 also injected a further £50bn of fresh money into the economy this month, therefore meaning that £175bn has now been spent on quantitative easing. In a statement, they said that the UK recession "appears to have been deeper than previously thought". 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 3rd month in a row, after it was cut from 1.25% in May, its 7th cut since last October, in an attempt to help restore economic growth in the eurozone.

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