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Six years of record-low base rate

By Wesleyan

Interest rates are to remain at 0.5 per cent for yet another month, and the decision by the Bank of England means they have been at the record-low level for six years.

In March 2009, the Bank's Monetary Policy Committee (MPC) decided to take emergency measures to boost the economy during the downturn, and part of that was reducing the base rate.

Now the economy is well on the way to a recovery, the Bank's policymakers had hinted that the rate could rise, but this is now thought to be unlikely in the short term with inflation at 0.3 per cent.

This is another record low and experts predict inflation could turn to deflation before it heads upwards again.

Last year, some MPC members pushed for interest rates to rise but the group agreed to keep them at 0.5 per cent when the nine-member panel met on Thursday.

Some experts say the rate will rise towards the end of 2015, while others say it will stay the same until 2016.

Copyright Press Association 2015

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