Interest rates held at 5%
The Bank of England has maintained interest rates at 5% for a fifth month in succession in an attempt to help the UK combat a slowing economy and rising inflation.
With predictions that the UK is heading for a recession – two successive quarters of negative growth - it remains to be seen how long the Bank can sustain the current interest rate.
Economic growth halted in the second quarter of 2008, ending 15 years of consecutive growth. With such an economic climate the Bank of England may have to cut interest rates before the end of the year.
Inflation is currently at 4%, more than double the Bank’s target figure and could rise to 5% by the end of the year or early 2009.
