This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8247709.stm
The article has changed 8 times. There is an RSS feed of changes available.
| Version 3 | Version 4 |
|---|---|
| UK interest rates remain on hold | UK interest rates remain on hold |
| (9 minutes later) | |
| The Bank of England has held interest rates at the record low of 0.5% for the sixth consecutive month. | The Bank of England has held interest rates at the record low of 0.5% for the sixth consecutive month. |
| It has also said it would continue to pump up to £175bn into the economy - so-called quantitative easing - but that it would not extend it. | It has also said it would continue to pump up to £175bn into the economy - so-called quantitative easing - but that it would not extend it. |
| Recent data has suggested that the UK has begun to climb out of recession | Recent data has suggested that the UK has begun to climb out of recession |
| But the Bank has warned recovery would be "slow and protracted" and that it would take months for the full impact of its policies to be felt. | But the Bank has warned recovery would be "slow and protracted" and that it would take months for the full impact of its policies to be felt. |
| Stagnation | |
| Optimism about the outlook for the UK economy has pushed the FTSE 100 index above 5,000 points for the first time since October 2008. | |
| Official data this week showed that UK manufacturing output rose at its fastest rate in 18 months in July. | |
| Respected researchers the National Institute of Economic and Social Research also said the UK economy grew 0.2% in the three months to August. | |
| One must now question the conventional view that cutting rates below 0.5% will not help David KernBritish Chamber of Commerce Should UK interest rates go negative? Former rate-setter turns on Bank Recession tracker: Interest rates | |
| But it said that a return to growth should not be confused with a "return to normal economic conditions". | |
| "There may well be a period of stagnation now, with output rising in some months and falling in others," the institute said. | |
| Economy boost | |
| The Bank's Monetary Policy Committee (MPC) last month increased the size of the quantitative easing programme by £50bn to create up to £175bn on the UK's balance sheet by, in effect, printing money. | |
| The bank has cut interest rates to a record low of 0.5% in an attempt to boost lending in the economy. | |
| But there have now been calls for the rates to be cut to less than zero in order to dissuade banks from holding onto the cash being pumped into the economy and lend it to individuals and companies instead. | |
| The Bank of England extending its stimulus programme to £175bn last month | |
| "One must now question the conventional view that cutting rates below 0.5% will not help," said BCC chief economist David Kern. | |
| The aim of quantitative easing is to encourage individual banks to expand their balance sheets - moving their reserves into something that offers a higher return, such as making new loans - and so increasing the supply of money in the economy. |