The Bank of England has voted to maintain the base rate at the record low of 0.5% for the 11th month in a row. The Monetary Policy Committee (MPC) cited the poor retail market and a generally "sluggish" economy as the factors behind the decision.

Increased inflation had led some commentators to speculate that the interest rates would be increased, but the MPC believes that inflation will fall below the 2% target in due course despite increasing to 2.9% last month.  

"On balance, the MPC believes that the prospect is for a gradual recovery in the level of activity," the Bank of England says.

The Bank of England has also decided against further quantative easing, having already spent all of the £200 billion originally created to inject into the economy, largely with the aim of increasing lending from banks to customers and businesses.

It is widely believed that interest rates could remain frozen into the second half of 2010, as the Government is expected to take every step to make sure the economy does not roll back into recession from its current precarious position.

Natasha Edgar, Head of Lender Property Services Team at Wilson Nesbitt solicitors in Belfast, responded to the news by saying that "home owners across Northern Ireland will have been waiting anxiously to see what the Government decided to do with interest rates. The large consensus is that once they start going up they will continue do so for sometime which will have a huge impact on people's monthly mortgage payments. The continued freeze is of great help to families already battered by the recession over the last two years."
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