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UK interest rates remain on hold

08 October 2009

The Bank of England's rate-setting committee has kept UK interest rates on hold at 0.5% for the seventh successive month, as widely expected.

The Bank also said it would continue with its programme of pumping £175bn into the economy, which it said would likely take another month to complete.

Interest rates remain on hold as data continues to show that any UK economic recovery remains patchy.

Figures out later this month could show that the UK has exited recession.

Weak industrial output

Many commentators have said that the economy probably expanded during the July-to-September period, citing rising house prices and a big rise in car sales - despite the later being helped by the government's scrappage scheme.

However, official figures showed earlier this month that UK industrial output fell unexpectedly in August, declining 2.5% from July.

This prompted the National Institute of Economic and Social Research think tank to predict that the UK economy failed to grow in the third quarter.

The official figures will be released by the Office for National Statistics on 23 October.

The economy contracted 0.6% between April and June, following a 2.4% decline from January to March.

The Bank of England's rate-setting monetary policy committee decided in August to pump another £50bn into the economy, taking the total cost of its quantitative easing policy to £175bn.

Source: BBC