Interest rates stay at 0.5 per cent for the third year

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The Independent Online

The Bank of England marked three years of pain for savers yesterday as it left interest rates on hold at their record low of 0.5 per cent.

The widely expected decision came after the Bank sanctioned a further £50bn of money printing in February, taking its quantitative easing programme to £325bn.

Rate-setters on the Bank's monetary policy committee have pulled out all the stops to revive a cratering economy over the past three years, although the typical savings rate has plummeted from 6.52 per cent in 2008 to just 2.78 per cent now.

Annuity rates for pensioners have also suffered because they are linked to yields on government bonds, which have been slashedby QE.

Despite yesterday's no-change decision, the MPC meeting is likely to have been the scene of fierce debate on the nine-strong committee.

Some MPC members were more reluctant to go ahead with the £50bn amid worries over inflation, although Adam Posen and David Miles voted for an even bigger £75bn injection. The hawks' case has been strengthened by the economy's apparent upturn since the start of the year. IHS Global Insight's Howard Archer said: "Interest rates could very well stay put at 0.5 per cent until 2014."