Interest Rates Held
UK interest rates have been held at a record low of 0.5% by the Bank of England’s Monetary Policy Committee (MPC).
Concerns about the strength of the economic recovery meant economists had expected rates to remain unchanged.
And…. Un clench!
The Bank also said it would not be extending its £200bn programme of quantitative easing.
Earlier, Bank figures showed that savers have missed out on £43bn due to low interest rates.
However, mortgage borrowers have gained £51bn.
Those who rely on the interest on savings for an income, such as some pensioners, have suffered as a result of low rates. However, many families with mortgages have benefited.
The Bank rate was cut to 0.5% in March 2009, and has remained there ever since.
The £43bn of losses savers have had to bear, comes from comparing their income before and after the Bank cut rates to 0.5%.
But because savings in banks and building societies are outstripped by mortgages, mortgage borrowers have gained by a wider margin.
They have paid £51bn less in monthly interest, the figures show.
Policymakers have come under increased pressure after Chancellor George Osborne admitted on Tuesday that the economy had weakened and that short-term hopes had been revised down in recent weeks.
The latest estimate from the National Institute of Economic and Social Research (NIESR) also suggested that the rate of growth in the UK economy slowed to 0.2% in the period from June to August.
Article from the BBC News website.
