Interest rates held at 0.5% for 15th month

Interest rates have been held at their historic low of 0.5 per cent for the 15th month in a row.

As widely predicted, the Bank of England chose to take no action on either its base rate or quantitative easing policy at the June meeting of its Monetary Policy Committee.

The decision will disappoint those desperate for more attractive savings interest rates, although comes as little surprise as the economy struggles to come to life.

Santander UK's chief economist Barry Naisbitt said the Bank is watching economic data "very carefully" to see whether it is meeting its expectation of the likely development of inflation and output.

He added: "Recent indicators, such as survey indicators of output, show a reasonably positive picture of economic activity, and gross domestic product growth in the first quarter has been revised up from 0.2 per cent initially to a slightly healthier 0.3 per cent."

Mr Naisbitt said the Bank expects inflation to move back towards its two per cent target as 2010 progresses.

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2010-06-11 13:52:19 © Moneyextra.com