By Marcus Leach

The Bank of England (BoE) today (Thursday) announced that the UK interest rate would be held at 0.5%.

The interest rate has now been at a record low of 0.5% for three years, despite persistent inflation.

It was also announced that there will be no further quantitive easing at present. At present the Bank's Monetary Policy Committee (MPC) has boosted the stimulus to £325 billion.

Minutes from April's meeting of the MPC showed that policy makers were becoming more concerned about inflation.

One member of the committee, Adam Posen, dropped his vote for more QE.

“The combination of sluggish activity and sticky inflation put the MPC in a difficult position, and this decision is likely to have been a close call," Ian McCafferty, CBI Chief Economic Adviser, said.

"But it appears that the persistence of inflationary pressures tilted the balance in favour of keeping the stock of asset purchases unchanged.

“With economic conditions subdued, and signs of euro area tensions building again, another round of QE cannot be ruled out. But we expect the recovery to be on a firmer footing in the second half of the year, as inflation eases and the global economy strengthens.”

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