UK Interest Rates Remain at 0.5% and Look Set to Stay There
It used to be that British businesses held their breath before the Bank of England's monthly announcement about interest rates.
Would they go up or down? And what would the pundits immediately begin predicting for next month?
But that was before new economic order. Everything's changed, or more precisely, there's no change. Because for the last 18 months the Old Lady of Threadneedle Street has kept her hand firmly on the interest rate dial without moving it one jot.
With interest rates wedged at a record low of 0.5% for a year and a half, it's become a case of no news is good news for British business. The resulting low levels of mortgage interest mean millions of households have more cash to spend elsewhere, and firms are hoping that at least some of that money will come their way.
Not that this stability is keeping the pundits quiet. Inflation continues to bubble along above the government's target and there's pressure for interest rates to start sliding upwards.
On the other hand, different indicators suggest that the economic recovery is, if not faltering, then certainly dropping to the lowest possible gear. All of this is set against a dark background of huge cuts in public services and, potentially, public sector jobs.
Only today Chancellor George Osborne has said that welfare spending is to be cut by a further four billion pounds a year. Taking into account other cuts, welfare spending overall is set to fall by 6%.
All this means that while next month's announcement from the Bank of England will probably be yet more no change, it'll still be awaited with bated breath.
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