Thursday, September 4, 2008
MPC holds UK interest rates at 5%
The Bank of England has kept interest rates on hold at 5% for a fifth month as it struggles to deal with a slowing economy and soaring inflation. But with reports signalling the economy is heading for recession, expectations are rising that the cost of borrowing will be cut by the end of the year. Economic growth ground to a halt in the second quarter of this year, its worst performance since the early 1990s. However, inflation is more than double the Bank's target of 2%.