Bank of England keeps interest rates at record low 0.5 per cent amid low inflation

LONDON – The Bank of England is holding its main interest rate at 0.5 per cent as policymakers seek to keep the economy growing and nudge up inflation.

Policymakers have been divided about when to start raising rates. But there’s little pressure on them to act, since inflation stands at 1 per cent, well below the bank’s 2 per cent target.

Economists suggest interest rates are likely to rise later this year, though that could depend on the severity of a global slowdown and the outlook for inflation.

Howard Archer, chief European economist at IHS, expects there to be at most one 0.25 percentage point rate hike in 2015. He noted Thursday that Bank of England Governor Mark Carney has indicated the bank will “look through” the impact of lower oil prices on inflation.