Bank of England holds interest rates steady in hopes of sustaining growth

Economic Indicators Associated Press

The Bank of England has decided to keep the main interest rate at a record low 0.5 percent as policy-makers look to sustain growth and nudge up inflation in Europe's third-largest economy.

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Policymakers have been divided in the past about whether it is time to raise rates. But with inflation at 1.3 percent, well below the 2 percent target, pressure to do so remains muted.

Chris Williamson, chief economist at Markit, said Thursday the lack of price pressures gives the bank leeway to keep rates low, "therefore increasing the likelihood of the current growth spurt being sustained."

The decision comes amid predictions that the economy will slow. The Office of Budget Responsibility has predicted that U.K. growth at 2.4 percent in 2015, down from the 3 percent predicted this year.