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Thursday, 5 May 2011

Interest Rates Held

Interest rates have been held at the historic low of 0.5%.

Dr Brian Sloan, Head of Business & Economic Policy at Greater Manchester Chamber of Commerce, said: “It is likely that global events of recent months, that have increased uncertainty over the economic outlook, have been a major factor in the Bank of England’s decision to hold interest rates at the record low of 0.5%. The strength of our recovery remains weak and recent data suggests that growth has been flat over the last two quarters.

“As a result it is imperative that private sector businesses are supported by this expansionary, low interest rate stance for a while longer. The Bank’s decision is the right thing to do and we said in February that it would do more harm than good if it increased in May as many anticipated.

“Talk that the Monetary Policy Committee will lose credibility by not tackling inflation ignores the wider brief that the committee is also bound by the Bank of England Act 1998 to support Government objectives for growth and employment. Global events will have eased inflationary concerns allowing the Bank to take this decision today, but that said we must not be complacent as we cannot rely on factors beyond our control acting in our favour over the longer term.”

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