Interest rates kept on hold at 0.5%

by Aaron Strutt

Sep 08 2011

Interest rates have once again been kept on hold at 0.5% and this is now the 30^th consecutive month without a change.

The decision was expected, especially after last month, where all Monetary Policy Committee members voted against a rise in interest rates.

Those who rely on their savings for income have been hit particularly hard. According to figures from the Bank of England, savers have lost £43bn due to low interest rates. However, mortgage borrowers have gained £51bn.

Ian McCafferty, chief economic advisor to the CBI business group, told the BBC: “Although recent data has brought further evidence of slower economic activity and business confidence has weakened, it is not clear that this requires an immediate policy reaction.

“We hope that the UK economy will be in a firmer footing next year, when a lower inflation rate will bring some relief for households.”

September 8, 2011