Rates held by central banks
BOTH Threadneedle Street and the European Central Bank (ECB) kept monetary policy on hold yesterday as both central banks were in wait and see mode.
In the UK, rates were kept at 0.5 per cent and QE at £175bn while the cost of borrowing in the Eurozone remained at one per cent.
City analysts had widely expected no move this month by the Bank of England, with most expecting a decision in November, when the Bank has a new set of inflation and growth forecasts.
While recent data has been improving, economists are far from optimistic about a UK recovery and expect monetary policy to remain loose for some time.
Ian McCafferty, chief economic adviser for the Confederation of Business Industry (CBI), said: “Some economic indicators have cast a more optimistic light recently.
“But businesses and households should be mindful that growth is expected to remain anaemic well into 2010.”
Across the Channel, the European Central Bank President Jean-Claude Trichet noted that interest rates were at an “appropriate level” as too much volatility could affect financial and economic stability.