Interest rates widely expected to remain unchanged
The Bank of England’s interest rate setters are widely expected to keep interest rates on hold today at the record low of 0.5%.
Should interest rates remain unchanged, it will be the third consecutive month at the current rate – the bank’s lowest since it was established over 300 years ago.
Prior to April, the Bank embarked on aggressive cuts over recent months to bring inflation down and fight off a prolonged recession.
In related news, the European Central Bank will announce its decision later today with regard to interest rates for the euro zone – rates are also expected to remain on hold.
Returning to the Bank of England, it was revealed last month that all members of the Monetary Policy Committee (MPC) voted in favour of increasing the quantitative easing plan by £50 billion, taking the total to £125 billion.
The Bank is due to complete its £125 billion spending on quantitative easing next month.
Meanwhile, it is hoped that the worst of the recession is over after the Chartered Institute of Purchasing and Supply’s (CIPS) services survey revealed that the services sector has risen for the first time in a year.
The survey’s headline reading rose from 48.7 in April to 51.7 last month – a good sign since the reading climbed above the key 50 mark.