BOEThe Bank of England has kept interest rates at a record low of 0.5%, despite signs that the UK economy is improving.

The decision was widely expected, given governor Mark Carney’s pronouncements that the Bank would not even consider raising rates until unemployment falls below 7%.

Even then, Mr Carney said a rate rise was not guaranteed.

The Bank’s Monetary Policy Committee has kept rates at 0.5% since March 2009.

The Bank also left its quantitative easing programme of monetary stimulus unchanged at £375 billion. It has remained at this level since July 2012.

With the unemployment rate at 7.6% and inflation, as measured by the consumer prices index, falling to 2.2% in October, economists believe there is little pressure on the Bank to raise rates at this stage, despite mounting evidence of a strengthening economy.

During his Autumn Statement, Chancellor George Osborne announced that the Office for Budget Responsibility had increased its UK growth forecast for 2013 from 0.6% to 1.4%.

 

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