Base rate to remain at 0.5%

In a blow to those seeking the best savings interest rates Bank of England has confirmed that the base rate will remain at 0.5 per cent.

The Monetary Policy Committee MPC yesterday August 4th voted to keep the rate at 0.5 per cent and the central bank reserves at £200 billion.

Both figures have remained unchanged since March 2009 and November 2009 respectively.

Ian McCafferty, CBI chief economic adviser, said that the current global economic climate has made "worrying reading" this month, which explains the MPC's decision.

He explained that the global economy is softening and inflation is expected to continue to rise in the UK.

"While we continue to believe that the UK economy will pick up into 2012, we won't see clear evidence of this in data for some months yet, leaving the Bank unlikely to alter its policy before the end of the year," Mr McCafferty suggested.

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2011-08-05 12:52:56 © Moneyextra.com