Bank maintains stance on interest rates

THE Bank of England has maintained its stance on interest rates opting to keep the level at its historic low.

The Monetary Policy Committee also held off from a further injection of quantitative easing; maintaining the level at £375bn.

The rate is coming up for its fourth anniversary in March and analysts have predicted that with growth predictions flat, it may remain at the current level for some time to come – possibly until well after the current Parliament and even into 2017.

Business leaders in the West Midlands are desperate to cultivate growth and want economic conditions as stable as possible so they can make their businesses as profitable as possible despite the tough climate.

With concerns about growth elsewhere, especially the continuing problems being encountered in the Eurozone, it looks as if the tough conditions will endure for some time to come.

The Coventry and Warwickshire Chamber of Commerce has welcomed the Bank’s decision.

Louise Bennett, chamber chief executive, said: “Low rates are a vital ingredient in building a sustainable economic recovery.

“The key to that recovery is helping more businesses to grow and take on new staff. There are many factors that will help companies to expand but helping them to access much-needed finance is critical.

“We need them to benefit from the low base rates and that is why we are pressing for the proposed Business Bank to be created as soon as practical.”

Richard Halstead, Midlands Director of EEF, the manufacturers’ organisation, added: “Today’s decision was no surprise as it’s likely the MPC would like to see more evidence on how much impact the Funding for Lending Scheme is having on increasing lending to households and businesses before deciding to move again on monetary policy. On-going above target inflation is being offset by continued weak economic activity which is keeping any decision to act finely balanced.”