Bank of England keeps rates on hold ahead of inflation report

[LONDON] The Bank of England kept interest rates at 0.5 per cent on Thursday ahead of the publication next week of new forecasts that will shape expectations for when the Bank will finally start to raise borrowing costs.

The BoE also said it would maintain at 375 billion pounds its stockpile of government bonds which it bought as part of its attempts to steer the economy through the fallout from the global financial crisis.

Both decisions were widely expected. The BoE has kept rates at their record low level since the depths of the financial crisis in early 2009.

The Bank is expected to raise rates only next year. A small majority of economists have predicted a first hike in the first quarter of 2015 while bets in financial markets point to the middle of the year or later.

REUTERS