Capital Economics: Rates to remain at 0.5% until 2015

The firm forecasts the BoE will keep rates at rock bottom levels until 2015 of 0.5% to alleviate the economy's fiscal consolidation. The estimate comes in the same week the BoE once again opted to hold interest rates, marking three years since rates were first cut to a record low. Vicky Redwood, the consultancy's chief UK economist, pointed out markets are not pricing in a rate rise until at least the end of next year. However, a combination of weak bank lending and sluggish economic recovery could potentially lead to rates remaining at 0.5% until 2015, she added. "We would not ...