The Bank of England will hold interest rates at a record low of 0.5 per cent amid continuing concern over the fragile economic recovery. This is the twelfth consecutive month that rates will be held at this level.
As expected, it also said that it will not resume its quantitative easing (QE) programme for the immediate future. QE was stopped last month, after £200bn had been spent on it in total.
Figures released last week showed that the UK economy grew by 0.3 per cent in the fourth quarter of 2009, compared with an initial estimate of 1 per cent growth. But the Bank fears that the return of VAT to 17.5 per cent and the low level of lending to small businesses could yet trigger a "double-dip" recession.
The economy returned to growth in the October to December period following six consecutive quarters of economic contraction - the longest recession since records began in 1955.
