Interest rates held at 0.5%

Earlier today the Bank of England's Monetary Policy Committee (MPC), which has nine members, met today to discuss the Bank of England base rate.

The decision was to hold the rate at 0.5%. This is now unchanged for the 23rd consecutive month.

At the meeting two members voted for a rate rise, and one for more quantitive easing.

Last month, Bank of England governor Mervyn King forecast that inflation could rise to 4-5% in the coming months because of higher food and fuel prices and a rise in VAT. However, he also added that inflation would fall back sharply in 2012.

The problem they have at the moment is yes they could raise the rate to simmer the raising inflation or keep the rate the same to aid the recovery.

The big concern I guess at the moment is that if we do raise the interest rates which will in turn increase the cost of borrowing and then probably tip the economy back into recession. This surley is not an option.

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