LONDON – The Bank of England has decided to keep interest rates at a record low of 0.5 percent, with inflation remaining very low despite the growing economic recovery.
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Policymakers also opted Thursday to refrain from pumping more money into the economy. With the inflation rate at zero — and some economists predicting it could even go into negative territory — there was no incentive to act.
Economist Howard Archer from IHS Global Insight says any interest rate hike could be delayed if there is prolonged political uncertainty after the May 7 general election in Britain, because it would dampen economic activity, particularly business investment.
He says it currently looks probable that interest rates will stay steady until 2016.