Rates on hold at 0.5%
THE Bank of England today held back from pumping more money into the economy as it also held interest rates at their record low of 0.5%.
The Bank raised its Quantitative Easing programme to £275bn in October amid fears over the strength of the economic recovery.
The deepening Eurozone debt crisis continues to plague markets and gloomy forecasts about consumer spending over the usually busy festive period have done little to raise spirits.
With the European crisis weighing heavily on sentiment all eyes are on Brussels where EU leaders are meeting for a ‘do or die summit’ on the debt crisis.
Interest rates have been at 0.5% since March 2009.
Dr Brian Sloan, chief economist at Greater Manchester Chamber of Commerce, said: “The speculation of imminent interest rate rises earlier this year now seem so far away, but as the Chamber warned we were leaving the fate of our economic recovery in the hands of overseas markets, particularly Europe.
“The warning signs were there and now the Government needs to ensure that infrastructure plans announced in the Autumn Statement are put into action swiftly, as there has already been too much of a delay responding to the needs of the domestic economy.”
David Ost, North West region director at EEF, the manufacturers’ organisation said: “While the economic outlook isn’t getting any better the MPC was unlikely to change tack for now from its current asset purchase extension. But, with downside risks to growth mounting in 2012, a further boost of QE in the new year is still firmly on the table.”
