UK interest rates 'to remain low into 2011'

08/09/2009

The Bank of England looks set to keep interest rates at record low levels well into next year and possibly beyond in a bid to ensure the economic recovery is not thrown off course, an expert has said.

Deborah Hyde of Citywire stated that Bank governor Mervyn King is expected to tell the Monetary Policy Committee later this week that it is still too early to tell if slashing rates to 0.5 per cent and pumping an extra £175 billion into the economy is pulling the UK out of recession.

Elsewhere, the international Organisation for Economic Cooperation and Development has told world governments to keep interest rates low and maintain their economic stimulus packages to support the fragile recovery.

Recent figures in the UK have demonstrated how the 'real economy' is continuing to struggle.

The British Retail Consortium said year-on-year retail sales fell in August after two consecutive increases as consumer confidence remains shaky. Meanwhile, the Chartered Institute of Purchasing & Supply's key index of manufacturing activity unexpectedly fell last month amid further job losses in the industry.

Vicky Redwood of Capital Economics said this continuing weakness in the economy means rates are likely to stay near their 315-year low.

"We think that official rates will be kept at their record low level until at least the end of next year and quite possibly longer," she commented.

Tags; Current UK Economy, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle,

Regional Debt Advice; Debt Advice Hyde,

• Share
• 
• 
• Store
• 
• Follow
•