Interest rates are frozen
Thu 8th May, 16:24:49 BST
The base rate of interest has been maintained at five per cent in May.
It follows April''s decision to cut the rate by 0.25 percentage point and continues the Bank of England''s Monetary Policy Committee''s (MPC''s) conservative approach to rate reductions.
Rates have fallen three times in the last six months, with the MPC choosing to announce a cut every other month since December 2007.
May''s decision to maintain the rate was widely anticipated but many experts believe that a cut will be announced sooner rather than later.
"The Monetary Policy Committee is caught between a slow growth rock and a high inflation hard place," said Henk Potts, equity strategist at Barclays Stockbrokers.
"Despite the upside risk to inflation, we expect the Bank of England to reduce interest rates gradually over the coming quarters, with rates finishing the year at 4.25 per cent," he added.
It follows April''s decision to cut the rate by 0.25 percentage point and continues the Bank of England''s Monetary Policy Committee''s (MPC''s) conservative approach to rate reductions.
Rates have fallen three times in the last six months, with the MPC choosing to announce a cut every other month since December 2007.
May''s decision to maintain the rate was widely anticipated but many experts believe that a cut will be announced sooner rather than later.
"The Monetary Policy Committee is caught between a slow growth rock and a high inflation hard place," said Henk Potts, equity strategist at Barclays Stockbrokers.
"Despite the upside risk to inflation, we expect the Bank of England to reduce interest rates gradually over the coming quarters, with rates finishing the year at 4.25 per cent," he added.
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