The base rate: past, present and future

The Bank of England (BoE) has just announced that its base rate will remain unchanged for the 26^th consecutive month.

The Bank`s Monetary Policy Committee (MPC) voted to keep the base rate at 0.5% today, despite concerns about the current rate of inflation.

It was widely expected that the base rate would remain at its all-time low of 0.5% today. Just yesterday, in fact, an article in The Telegraph quoted Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, saying that he believes the base rate will remain unchanged for some time still.

He said: "We think it unlikely that the MPC will move before November and it could quite easily be 2012 before we see the first increase in Bank Rate."

Another article in the same newspaper reported that the British Chambers of Commerce and the Institute of Directors (IoD) urged the Bank`s policy makers to keep interest rates at 0.5% - saying that an increase at this stage would `damage economic recovery`.

Read the rest of the article here.