Interest rates continue at record low

Factoring is a viable alternative funding solution to bank credit for many SMEs

UK interest rates were held once again at their record low of 0.5%, it was confirmed yesterday by the Bank of England’s Monetary Policy Committee.

Interest rates have remained static since March 2009, when the rate was lowered from 1.0% to 0.5%.

The Bank didn’t announce any increases in its quantitative easing (QE) policy, although attention will be paid to the Bank’s minutes, published in two weeks, which may hint at future plans for QE.

The last QE measures saw £75bn injected into the economy in October 2011.

Economic Outlook

The UK’s economy for the last three months of 2011 was estimated to have grown by 0.1% by the National Institute of Economic and Social Research, enough to avoid a recession for the time being, but still 3.6% below its pre-recession peak.

But there was potentially better news in December suggesting conditions in the economy had improved in December as the service sector saw quicker growth and the contraction of the manufacturing sector slowed from November.