UK interest rates to stay at record low 'until 2014'

clock •

A base rate of 0.5% will begin to look like the 'new normal' with hikes unlikely until 2014, according to a leading economic forecaster.

The Ernst & Young Item Club said rates would need to be kept low to counter-balance the Government's spending cuts. Professor Peter Spencer, ITEM's chief economic adviser, added the Bank may even have to restart its £200bn quantitative easing programme, the Telegraph reports.  He said: "Monetary policy [will have to] remain very loose in order to offset the dampening effects of fiscal policy. Further asset purchases cannot be ruled out if there are signs that the recovery is relapsing." ITEM's interest rate forecast is in contrast to that of the Office for Budget Responsibility (OB...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

Advised clients want more personal investment communication

Advised clients want more personal investment communication

Four in ten say comms focused more on product than goals

Jenna Brown
clock 12 November 2026 • 3 min read
How economic abuse manifests itself in pensions, mortgages and protection

How economic abuse manifests itself in pensions, mortgages and protection

Second in a three part series

Shelley Read
clock 11 November 2026 • 5 min read
Celtic FP founder launches online admin platform for advisers

Celtic FP founder launches online admin platform for advisers

‘Developed by people who understand the industry’

Jenna Brown
clock 10 November 2026 • 2 min read