The Bank of England’s Monetary Policy Committee voted on Thursday to hold the official bank rate at the record-low level of 0.5 percent and maintain its economic stimulus program at $605 billion.
“Most members of the committee are probably pretty happy to keep things as they are and see how the FLS evolves and how the economy picks up,” Vicky Redwood, an economist at Capital Economics, said, according to The Telegraph.
Manufacturing, fueled by domestic demand, grew at the fastest pace in December in over a year, but the outlook changed after an unexpected dip in the services sector sparked concern that the country could not prevent against another recession, The New York Times reports.
Redwood said that economic growth in the U.K. will be slow-going.
“It’s still not looking good,” Redwood said, according to The New York Times. “The underlying picture is still flat.”
Howard Archer, the chief U.K. and European economist at IHS Global Insight, said that the rate could remain at an all-time low through 2013 and possibly 2014.
“The Bank of England certainly isn’t going to raise interest rates anytime soon given the economy’s extended weakness and limited recovery prospects in the face of a tight fiscal squeeze and still serious problems and uncertainties in the Eurozone,” Archer said, The Telegraph reports.