The Bank of England has declined to change the base rate this month, halting a steady decline since the onset of the credit crunch.
The latest announcement from the Bank of England's Monetary Policy Committee (MPC) has revealed that the base rate will remain unchanged this month.
Since the onset of the financial downturn, the Bank has been steadily decreasing the base rate, from five percent in October down to its current value of 0.5 percent. The rate has never been lower in the three centuries of the institution's existence.
The news that the rate has not been reduced may come as respite to the UK's savers, who have seen the income from their nest-eggs vastly reduced as banks have brought down savings rates in line with the Bank's baseline rate. Average annual rates carried by instant-access accounts have been reduced to under 0.2 percent
Rather than focusing on interest rates, the MPC reported on its quantitative easing programme, a policy it introduced at its last meeting in March.
Most commentators had predicted that the base rate would remain unchanged. JP Morgan economist Malcolm Barr suggested that this could be the Bank's policy for the foreseeable future.
"Looking further forward, we continue to anticipate rates remaining at 0.5 percent for an extended period of time - in our forecasts that means until early 2011," he said.
