INTEREST rates will not rise for at least a year, which will please Bristol businesses but be less welcome for pensioners and savers. Bank of England governor Mark Carney, right, issued new guidance after falls in unemployment had cast doubt on its previous policy to keep rates low until the jobless figure fell below seven per cent. Now the bank will hold rates at 0.5 per cent until so- called "spare capacity" in the economy is taken up, a more obscure measure.
Ben Brettell, economics editor at Bristol investment firm Hargreaves Lansdown, said: "The real message is that Mark Carney intends to keep rates low for as long as possible. Inflation is on target, and the economy is recovering strongly - why would the Bank risk upsetting the applecart by raising interest rates? "Furthermore he made it very clear that when rates do start to rise, it will be a gradual process and rates are likely to stabilise at much lower levels than we saw pre-crisis. This is clearly bad news for savers, but it's good news for investors and borrowers."
Phil Smith, managing director of local commerce organisation Business West, said: "Businesses require stability in order to continue to drive the recovery."