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Bank of England holds rates at 0.5 per cent

The Bank of England’s monetary policy committee has voted to keep interest rates at 0.5 per cent.

It will also maintain its quantitative easing programme at £375bn.

Rates have now been at a record low for almost five years.

There had been suggestions the central bank could raise interest rates sooner than forecast after data published last month showed unemployment fell sharply to 7.1 per cent at November.

Under his forward guidance policy set out in August, bank governor Mark Carney said a rate rise would be considered when unemployment falls to 7 per cent.

He has since reiterated the 7 per cent level is a “threshold, not a trigger” for rate rises.

John Charcol senior technical manager Ray Boulger says: “The short-term message for anyone wanting a five-year fix is not to hang around, as rates are only going one way in the short-term. But it would not be wise to chase rates up very far as most indications are still that bank rate will not rise until at least the second half of next year, and quite possibly not until 2016.”

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