UK Interest Rates Holds at 0.5%

UK Interest Rate Holds at 0.5%.

The UK’s interest rate remains at 0.5% after the Bank of England (BoE) offer no hints or guidance on whether they may rise.

The base rate has remained at 0.5% since 2009. The Bank of England Governor Mark Carney said back in August that for a rise of the base rate, unemployment would have to decline to 7%, and with an improving economy and confidence on the rise this could happen sooner than thought.

The Bank predicted in 2013 that unemployment would not reach 7% until 2016, but as the confidence of businesses begins to greatly improve many are planning on expanding and employing more staff. This has meant that unemployment has already hit 7.4% and many are thinking that the 7% goal will be reached sometime this year.

If the goal of 7% is reached many are predicting the rise will happen shortly after, however Mark Carney stated that if the 7% mark was reached, it would not automatically result in a rise to interest rates. The Bank would more than likely deploy other tools for helping the economy.