GBP – Bank of England Holds UK Rates at 0.5 Percent

UK interest rates have been held at the record low of 0.5% for another month by the Bank of England.

The Bank also kept the size of its bond-buying economic stimulus programme unchanged at £375bn.

The news is in line with analysts’ expectations, despite recent evidence that the UK economic recovery is strengthening.

Worries about rising house prices in parts of the UK have intensified the debate over when rates might increase.

The Bank’s Monetary Policy Committee (MPC) have kept rates at the historic low of 0.5% for more than five years, amid worries that the finances of many individuals and businesses remain too weak to withstand a rise.

But the pace of economic recovery is picking up, and last week the Organisation for Economic Co-operation and Development (OECD) raised its UK growth forecast for this year from 2.4% to 3.2%.

The OECD did, however, sound a warning that the housing market could be overheating. It said that the UK government should consider restricting access to the Help to Buy scheme, which provides mortgage guarantees and loans to people struggling to find deposits on homes.

via BBC

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