Today's announcement by the Bank of England that the base rate would be held at 0.50% is no surprise, despite the pressures that are evidently within the system in terms of higher prices for things that most of us have to pay for. Increasing interest rates at this point, whilst the economy is fragile would seem somewhat counter-productive. However, how much longer will the Bank hold out is now very limited. My guess is that original predictions for a rate rise in July seem likely, though I would be happy to be wrong.
If you wanted to know what quantitative easing is all about, the Bank of England have a short and snappy video which is worth a quick view. The sad reality though is that our recovery is based upon printing money and then effectively lending it out, which really just fuels a debt-based economy. True some assets are being purchased with the money, the crunch question being - are they over-priced?
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