Bank of England keeps interest rates at record low; Pound holds gains vs dollar
On Thursday the Bank of England announced interest rates will be unchanged at 0.5%. The Bank also maintained the size of its bond-buying stimulus programme unchanged at £375bn. The pound sterling remained higher against the dollar after the news.
The decision by the Bank's Monetary Policy Committee (MPC) comes more than six years after the record low was introduced.
Sterling kept its gains against the greenback with GBP/USD at 1.5395, 0.36% higher for the day, from around 1.5420 before the news.
The six years of record-low interest rates have cut savings' returns,
while mortgage borrowers have benefited from lower repayments, says BBC.
Ultra-low inflation, which turned negative in April at -0.1%, has put on hold expectations about the Bank raising rates in 2015.
In May, the Bank signaled in its quarterly inflation report that it was likely to raise the cost of borrowing in the middle of next year.
Meanwhile, recent data from the Office for National Statistics confirmed that UK gross domestic product (GDP) growth slowed to 0.3% in the first quarter, which was its worst showing since the end of 2012.
Howard Archer, chief economist at IHS Global Insight, said: "The Bank of England was always a nailed-on certainty to keep interest rates at 0.5%. Indeed, the odds currently strongly favour the Bank of England sitting tight on interest rates (and on the stock of quantitative easing) over the rest of 2015."
He added that the Bank of England is expected to start edging interest rates up in the first half of 2016.
