Bank of England leaves interest rates unchanged at 0.5%

Last week's positive GDP news eased pressure on the Bank to further stimulate the economy

(EPA)

The Bank of England left interest rates unchanged today as it kept the City waiting on fresh measures to stimulate the recovery.

Rates were held at their historic low of 0.5 per cent and the Bank's quantitative easing (QE) programme of pumping money into the economy remained at £375 billion.

An announcement on whether it will adopt a policy of “forward guidance” on the future path of rates will not be made until next week.

Figures last week showing that gross domestic product (GDP) growth had doubled to 0.6 per cent eased pressure on the Bank's Monetary Policy Committee (MPC) to take further stimulus measures this time.

But GDP remains 3.3 per cent below pre-recession levels and the MPC has said the recovery is “weak by historical standards”.

It means that under new governor Mark Carney, considered an activist on monetary policy, the Bank is considered likely to pursue measures to speed the upturn towards “escape velocity”.

A formal decision on whether it will adopt a policy of forward guidance - a tool used by central bankers to reassure markets about the future path of interest rates - is due to be announced next Wednesday.

PA