Bank leaves rates unchanged

The Bank of England's Monetary Policy Committee (MPC) has left interest rates on hold at 0.5%.

The MPC has now left rates frozen for nearly two and a half years - the longest period of inertia since World War Two.

The committee has also decided not to implement further quantitative easing, leaving the asset purchase programme unchanged at £200bn.

The move to keep interest rates at an all-time record low for a 29^th consecutive month was widely expected.

A survey conducted by the BBC, which polled 32 economists, indicated the majority do not expect interest rates to rise until next year at the earliest.

Twenty-six of the economists said rates will not rise this year, and three predicted no rate increase until 2013.

AEGON Asset Management's head of international rates John McNeill said the low interest rate is justified against a brackdrop of weak economic activity. 

"Inflation is likely to continue to rise as the impact of the recently announced rise in utility prices is felt," said McNeill. 

"However, with economic activity remaining weak, evidenced by the dip in the manufacturing PMI below 50 and lack-lustre GDP data, the majority of the MPC believe that the current very low interest rate remains justified."