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United Kingdom : BANK OF ENGLAND holds UK interest rates 0.5%

June 7, 2014

United Kingdom interest rates have been held at the record low of 0.5% for another month by the Bank of England.

The size of the Bank s bond-purchasing economic stimulus programme was kept unchanged at £375 billion.

The decision was widely anticipated, despite continued signs of strength in the UK economy, according to the British Broadcasting Corp.

In May 2014, the Bank of England reiterated it was in no rush to increase rates, with governor Mark Carney saying they may stay low for some time .

Carney however, added the economy had edged closer to the point where interest rates would need to increase.

Commenting on the bank s announcement, chief economist at the British Chambers of Commerce, David Kern, said, The decision to keep interest rates and quantitative easing on hold was the right one. With annual CPI inflation below target, the MPC can afford to wait before tightening their policy. The strong rise in sterling over the past year, making UK exports more expensive, is an important reason for not raising interest rates prematurely.

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Source: TendersInfo (India)

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