Bank of England
The Bank of England today announced as expected that it had maintained the Bank Rate at 0.5%.
The Bank of England last reduced its Bank Rate by 0.5 percentage points to 0.5% in March 2009 and it has remained unchanged since. However, with the economy recovering some experts have forecast that it could rise as early as later this year or more likely 2015 or 2016, particularly if inflation started to rise sharply.
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Today's announcement means that the base rate has been unchanged for over five years.
The UK economy has seen rising GDP growth recently and falling unemployment. There has been speculation that this may lead to wage growth and pressure on inflation but recent inflation numbers have been benign.
Governor Mark Carney has said previously that the base rate will not be reviewed or increased until unemployment fell to 7%. However, recently the Bank has said that the Base Rate would only be reviewed when this happened and a Base Rate cut at that time was not a foregone conclusion.
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