UK interest rates have been held at a record low of 0.5% for another month by the Bank of England. It also decided to maintain its quantitative easing program, designed to stimulate lending in the economy, at the £375bn already spent.
The Bank's Monetary Policy Committee has held rates at 0.5% since March 2009 to try to help economic recovery. Until recently rates were expected to rise early next year, but analysts now think this could be pushed back.
The Bank warned last month that the inflation rate could fall to as low as 1% in the coming six months, well below its 2% target rate. One factor in keeping inflation low has been the 25% fall in the oil price since the summer, which has cut fuel prices at the pump for motorists.
Fierce competition between supermarket chains has also meant cheaper food for consumers.
Chris Williamson, chief economist at research firm Markit, said the downward pressures on prices gave the Bank leeway to keep rates low, therefore increasing the likelihood of the current growth spurt being sustained.
Howard Archer, an economist at IHS Global Insight, said: It would now be a surprise if the Bank of England raised interest rates before the latter months of 2015, especially given the disinflationary pressures coming from very low oil prices.
It looks highly improbable that there will be an interest rate hike before the May 2015 general election.
Economic surveys released earlier this week suggested that economic growth was holding up, with the dominant services sector strengthening in November.
The purchasing managers' surveys from Markit indicated economic growth of 0.6% in the final three months of this year, the research firm said, slightly lower than the 0.7% rate recorded in the third quarter.
The chancellor said in the Autumn Statement on Wednesday that the UK economy would grow by 3% this year, up from a previous forecast of 2.7%, with growth of 2.4% next year.
Last month, two of the nine MPC members, Ian McCafferty and Martin Weale, again voted for a rise in interest rates to 0.75%. The minutes of the MPC meeting said that there had been a material spread of views on the committee on the risks to the outlook for inflation.
However, they added: For most members, the outlook for inflation in the medium term justified maintaining the current stance of monetary policy.” Minutes of this month's meeting will be published on 17 December.
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One factor in keeping inflation low has been the 25% fall in the oil price since the summer, which has cut fuel prices at the pump for motorists.Dec 05th, 2014 - 10:12 am 0
Whilst here in Uruguay we had the murdering commie bastard No Money Pepe unilaterally slap 10% on the price of fuels and even the crook Sendic who was running the crap shoot at the time didn't know it was coming.
Sendic managed to ensure high prices remained by locking in under new, undisclosed terms, the oil supply contract with Venezuela!
I have to say that most of the government behave like the children at Christmas who go for the shiny pretty coloured toy BOX to play with, ignoring the real toy enclosed.
It would be laughable if it were not so tragic.
the UK economy would grow by 3% this year, up from a previous forecast of 2.7%, with growth of 2.4% next yearDec 05th, 2014 - 01:15 pm 0
not to bad,
A lot better than some we can name...
the UK economy would grow by 3% this year, up from a previous forecast of 2.7%, with growth of 2.4% next yearDec 05th, 2014 - 08:14 pm 0
the problem with the uk is that in spite they can grow, lets say 1.5 or 2%, which is nothing, they will be a perpetual 3rd world country, with millions of people living under the poverty line, etc.
they also have +/- 20.000 slaves there.
it is like an african country inserted in europe.
Slavery levels in UK 'higher than thought'
There are 10,000 to 13,000 slaves in the UK, says new report