Bank of England's Monetary Policy Committee voted unanimously in favour of a Bank Rate freeze
Bank of England's Monetary Policy Committee did not discuss whether to raise or cut interest rates at its December meeting raising the prospect of Bank Rate staying on hold for many months to come.
Howard Archer, an economist at IHS Global Insight said: "It is very clear that interest rates will not rise for many, many months to come – we do not expect any hike before the second half of 2013 and it currently looks eminently possible that the Bank of England could keep interest rates down at 0.50pc through to 2014.
He added that it was significant that even at the height of the 2008/9 recession, the Bank of England did not lower interest rates below 0.50pc, which reflected doubts within the MPC that even lower interest rates would have a net beneficial impact.
"It is notable that the December minutes once again did not reveal any discussion within the MPC over the possibility of trimming interest rates from 0.5pc. This suggests that they are unlikely to go down lower. Indeed, it is significant that even at the height of the 2008/9 recession, the Bank of England did not lower interest rates below 0.5pc, which reflected doubts within the MPC that even lower interest rates would have a net beneficial impact," he said.
Minutes from the MPC's December meeting revealed that some committee members thought the outlook for the economy had deteriorated during the month and further money printing would be required in due course.
Vicky Redwood, UK economist at Capital Economics, said: "December's UK MPC minutes reiterate the committee's view that there is little point in trying to fine-tune policy, but nonetheless suggest that the door remains open to more QE before too long."
The Bank published its quarterly inflation report last month, in which it forecast a heightened risk of a double-dip recession and paved the way for another bout of QE.
Bank governor Sir Mervyn King sent a stark message to political leaders as he flagged an unresolved eurozone debt crisis as the "single biggest risk" to the economy.
The worsened prospects for the UK economy mean the Bank expects inflation to fall far quicker than previously estimated, hitting the Government's 2pc target in the second half of next year before falling to as low as around 1.3pc in 2013.
However the MPC noted in the December minutes it was a possibility that inflation will fall slower next year than the pace implied in its central projections.
Vicky Redwood, UK economist at Capital Economics, said: "December's UK MPC minutes reiterate the committee's view that there is little point in trying to fine-tune policy, but nonetheless suggest that the door remains open to more QE before too long."
The Bank published its quarterly inflation report last month, in which it forecast a heightened risk of a double-dip recession and paved the way for another bout of QE.
Bank governor Sir Mervyn King sent a stark message to political leaders as he flagged an unresolved eurozone debt crisis as the "single biggest risk" to the economy.
The worsened prospects for the UK economy mean the Bank expects inflation to fall far quicker than previously estimated, hitting the Government's 2pc target in the second half of next year before falling to as low as around 1.3pc in 2013.
However the MPC noted in the December minutes it was a possibility that inflation will fall slower next year than the pace implied in its central projections.
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