The Monetary Policy Committee of the Bank of England met recently, where it is understood they elected to keep interest rates at their 32 month low of 0.5 per cent in the face of rampant inflation increases.
The Consumer Price Index reported back in September that the nation’s inflation rate rose to 5.2 per cent, which has been crippling the effective return on savings accounts. This is nearly three times the 2.0 per cent target rate set by the BoE.
Personal and business bank account experts have expressed growing concerns that the British economy could enter a double-dip recession in 2011’s final quarter. However, an additional quantitative easing increase by the Government is not anticipated.
The MPC increased quantitative easing last month by a factor of £75 billion in order to give the economy a much-needed shot in the arm. Despite the measures, the economic situation in the UK has continued deteriorating, but industry experts believe that additional measures may be on the agenda as early as right after the Christmas season if the economy still shows no signs of coming about.
THe ongoing credit crisis in the eurozone is considered a major threat to the economic recovery of the UK by the Bank of England. No solution has yet to be reached by EU leaders, with Ireland, Portugal, and Greece already seeking bailouts after the costs of their borrowing rose to critically high levels, and Italy now may join the three EU member countries in seeking financial help.
The financial issues plaguing Italy has already caused the Confederation of British Industry to revise its growth forecast for the British economy, reducing it to 0.90 per cent from its previous 1.3 per cent figure for 2011.