Capital Economics: Rates to remain at 0.5% until 2015

The Bank of England will keep interest rates at record lows for another three years, according to Capital Economics.

The firm forecasts the BoE will keep rates at rock bottom levels until 2015 of 0.5% to alleviate the economy's fiscal consolidation. The estimate comes in the same week the BoE once again opted to hold interest rates, marking three years since rates were first cut to a record low. Vicky Redwood, the consultancy's chief UK economist, pointed out markets are not pricing in a rate rise until at least the end of next year. However, a combination of weak bank lending and sluggish economic recovery could potentially lead to rates remaining at 0.5% until 2015, she added. "We would not ...