UK interests are to be held at a record low of 0.5 per cent for another month, the Bank of England has confirmed.
However, the bank's governor Mark Carney hinted that this trend could come to an end at some point this year. The Monetary Policy Committee (MPC) is expected to publish an explanation of the bank's decision to keep interest rates at this record low later this month. It provides some positive news for mortgage holders and provides relief for businesses dealing with debt repayments.
The Bank of England also confirmed that quantitative easing was unchanged at £375 billion. The decision to keep interest rates at a record low represents the 65th consecutive month where policymakers have come to this verdict. However, should the minutes of the MPC meeting, due to be released on August 20th, reveal a sway of votes in favour of a rate rise it would represent the first split since July 2011.
There is now considerable suggestion that the rates will begin to rise once again either later in the year or in early 2015. Chris Williamson, chief economist at Markit, said that he expects the minutes of the meeting to show an opinion which is moving closer towards a decision to increase rates.
Mr Williamson added: "It's all about when wage growth starts to pick up: if pay starts to rise in coming months, the first rate hike looks likely in November. Otherwise, any tightening of policy can wait until next year."
The UK has been continuing on a path to recovery in recent months. The nation's industrial and manufacturing output has been improving and edged back into growth in June after dropping 1.3 per cent in May. Figures from the Office for National Statistics showed a smaller-than-expected rise of 0.3 per cent but added to an overall increase of 1.2 per cent across the past 12 months.
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