Business interest rates hold at 5%

The monetary policy committee of the Bank of England voted on Thursday to hold the interest rates at .5% and not to extend its programme of cash injections back into the economy.

The decision was expected by most and comes as the state of the economy showed mixed signs during the early months of 2010.

Although the service and retail sector showed signs of weakness during January which may have partially been due to the heavy snows, February showed signs of recovery activity.  Overall the housing market once again seems to be weakening with prices starting to fall in February according to measures by both Halifax and Nationwide.

Measures that the Bank has been watching have also shown positive trends such as the M4 money which rose by about two percent in the first quarter of 2010, a drastic change from their steady decrease over the four prior months.

They currently have quantitative easing in place is which is the policy of creating money in the economy so that people spend more, which is aimed at helping to prevent a decline in the supply of money as banks reduce the amount of credit they issue.

In their statement on Thursday the Bank reinforced their previous stance that they will not change their current monetary policy except for in months where inflation forecasts for the quarter are available.

The last time that forecasts were published was back in February which prompted the MPC to put a hold on quantitative easing, which will be looked into again in May when the next set are published.