Frank O'Donnell

The Bank of England held interest rates at 0.5% yesterday, which was to be expected.

 It is also likely that that they could stay below 1% for the next five years as economists are not expecting a rise from the monetary policy committee (MPC).This is due to the MPC having kept rates at 0.5% since March 2009.

From reports, it appears that consumer spending also seems to have held up better-than-expected over the festive period but the cost of borrowing has been at a record low since March 2009.

In its latest quarterly Inflation Report in November the MPC admitted that the outlook for medium-term inflation was highly uncertain, and that the key CPI measure was likely to break through the 3% upper barrier over the next few months.