The Bank of England's Monetary Policy Committee (MPC) announced at midday today that UK interest rates will once again be held 0.5% (external website). The interest rate consequently shows no sign of budging from 05%: the lowest level ever seen in the 315-year history of the Bank of England.
However, latest forecasts from the CBI predict that interest rates will soon rise (external website). It expects that the MPC will vote to take interest rates above 0.5% in Spring 2010, and that they will reach 2% by the end of 2010.
The CBI says that this will reflect both a response to the UK's return to economic growth and the need to tackle rising inflation.
Inflation will be "volatile" in 2010 (external website), according to CBI chief economic advisor Ian McCafferty.
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