Base rate held again

The Bank of England has held the base rate at 0.5 per cent again, with the possibility growing that it will continue to sustain the record low rate throughout 2012.

Consumers struggling with debt and potentially facing repossession were mortgage rates to rise may have been relieved by the news, although it was not unexpected. 

The Monetary Policy Committee also decided not to raise the level of quantitative easing (QE) from the present £325 billion total of asset purchases.

Discussing QE, head of economic analysis at the Confederation of British Industry Anna Leach said: "Both official and survey data continue to present a mixed picture of the economy, so this decision would have been a tricky one."

International Monetary Fund managing director Christine Lagarde recently called for the UK to lower interest rates to zero and increase QE to boost the economy.

It also said tax cuts and increased infrastructure spending should be considered by the government.

By James Francis