UK interest rates kept at 0.5% for 15th month in a row

UK interest rates have been kept on hold at a record low of 0.5% by the Bank of England for the 15th month in a row.

The Bank also decided not to inject any more money into the UK economy under its policy of quantitative easing (QE).

Interest rates have now been at 0.5% since March 2009.

Meanwhile, a Reuters poll of 61 economists suggested that the central bank would not raise rates until next year.

Trevor Williams, chief economist at Lloyds Banking Group, said the decision was "no shock at all".

Inflation in April hit its highest rate in 17 months. On the Consumer Prices Index (CPI) measure, inflation hit 3.7% - well above the Bank's target of 2% and the highest rate since November 2008.

The Bank uses interest rates to try to curb inflation, but Mr Williams said: "The target was never meant to be hit every single month. It's a medium-term target. And I think they're quite right to hold off. "I think [inflation] will fall back later in the year."

Source BBC News Thursday, 10 June 2010 12:37 UK