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Interest rates 'will not rise until 2011'
General News |
24/12/2009
The Bank of England is likely to keep interest rates on hold until 2011 at least, it has been claimed.
According to Alan Clarke, UK economist at BNP Paribas, any rise would be inappropriate in the current economic and political climate.
With the general election coming in the spring, there is a strong likelihood of spending cuts and tax rises when the new government is formed, he suggested.
"The Bank of England knows that fiscal policy tightening is coming so they are not going to tighten interest rates ahead of it being announced," he added.
"There won't be any interest rate hikes throughout the whole of 2010 and probably 2011."
Earlier in December, interest rates were held at 0.5 per cent for the tenth consecutive month by the Bank's Monetary Policy Committee.
It also decided to continue with its £200 billion quantitative easing policy until at least February 2010.
Posted by Stephen Wilkinson
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