Bank leaves interest rates on hold

The Bank of England has kept rates on hold.

The Bank of England has kept rates on hold. - Credit: PA

The Bank of England left interest rates on hold today in its first policy decision since official figures showed inflation turning negative.

Ultra-low inflation has pushed back expectations of when the Bank will start to raise rates, which have remained at 0.5% for more than six years, while the latest economic data appear to have killed off any chance of a hike coming soon.

Closely-watched figures from the dominant services sector yesterday signalled a sharp slowdown in growth in May, dampening hopes that the pace of the recovery could bounce back in the second quarter after a weak start to the year.

Today’s decision also saw the Bank leave the scale of its money-printing quantitative easing (QE) programme unchanged at £375 billion.

It comes a day after the European Central Bank left its interest rate on hold at 0.05% and said its own 1.1 trillion euro (£810 billion) stimulus programme was helping to support a modest recovery in the eurozone.

The Bank of England announcement comes after official figures showed Consumer Price Index (CPI) inflation fell to minus 0.1% in April, in line with expectations.

It marked the first time inflation turned negative in more than half a century.