It has been announced that interest rates in the UK have been kept on hold at a record low of 0.5% by the Bank of England’s Monetary Policy Committee.

Amid concerns regarding the strength of the economic recovery, as well as the eurozone debt crisis, many economists were expecting the rates to remain unchanged, as they have since March 2009.

The BoE did not comment on any increase in its policy of Quantitative Easing, since saying that it would introduce another £75bn into the economy back in October. This is after the £200bn that the Bank has pumped into the economy, through asset purchases between March 2009 and February 2010.

Chief Economic Adviser of the CBI employers’ organistation, Ian McCafferty, has said that “with the Bank’s current round of asset purchases likely to run into early next year, this decision to keep monetary policy on hold is in line with our expectations.”

The BoE did give an indication, during November, that it will take until February at the earliest to administer the latest £75bn expansion of the Quantitative Easing programme.

Despite this, many experts in economics are expecting a further £50bn – or more – to be distributed through the QE programme in the first part of the new year.

In related news, the influential NIESR think-tank has come out with an estimate last week that growth in the economy has once again slowed in the last three months, falling to 0.3 per cent in November, compared to the 0.4 per cent in the three months to October.

This news comes just after Bank governor Sir Mervyn King issued warnings to UK banks, telling them to brace themselves for a potential, but imminent, eurozone collapse amid fears of a second credit crunch.

One analyst for HIS Global Insight has said “holding bank on more QE until early 2012 also gives the MPC more time to judge whether inflationary pressures are easing, which some committee members believe is important for the Bank of England’s credibility before it goes further down the QE road.”

If the country does enter another Credit Crunch, it may be worth while weighing up your options in order to make it through the month.

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