Interest rates left unchanged

12 April 2012

THE Bank of England voted to keep interest rates at 4% today – the third consecutive month that they have been left unchanged. The decision, announced at noon, was widely expected after news this week that there were signs of recovery in the manufacturing sector.

The last cut in rates was in November when the monetary policy committee, headed by Bank of England Governor Sir Eddie George, lowered the cost of borrowing by a surprising half percentage point. That cut was the seventh made by the Bank last year, and brought rates to their lowest for nearly 40 years.

Economists widely believe the interest rate-cutting cycle, has come to an end. The City is now pencilling in rises for later in the year, when the global economy is expected to perk up.

John Butler, economist at HSBC, said: 'We believe rates have already troughed at 4% and expect no interest rate rise until the third quarter.'

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