Base Interest Rate stays at 5.25%
The Bank of England have come to their decision and decided to keep the UK's base interest rate at 5.25%, as predicted.
Last month they reduced the rate from 5.5%, but after discussions this morning though it appropriate to keep it at the same level for another month.
There are concerns about a potential growing rate of inflation, which is why they probably chose to keep the interest rate the same. Our inflation rate currently stands at 2.2%, the target being 2%.
It is a difficult choice to make, as we seem to be experiencing price rises, especially with food and fuel prices, whilst still being having a lukewarm economy, as financial institutions are finding it difficult to raise capital, which in turn makes it harder for consumers to get a mortgage.
The next meeting to decide on the interest rate will be in a months time, on the 10th April 2008.
The Bank of England's role within our economy is to keep our finance systems as stable as possible, maintain interest rates at a level which keeps the rate of inflation low (around the 2% mark). They also issue all of our bank notes. Read more about them at www.bankofengland.co.uk.
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