BoE keeps rates at record low

LONDON, July 10 (AFP): The Bank of England (BoE) opted Thursday to keep interest rates at a record-low 0.50 per cent, despite Governor Mark Carney's recent warning that they could rise sooner than expected.

The British central bank's nine-member monetary policy committee (MPC) also decided after a two-day meeting to maintain the level of cash stimulus, or quantitative easing, at £375 billion ($641 billion, 471 billion euros).

Both decisions were in line with market expectations and were shrugged off on the London stock market. The BoE will publish minutes from the gathering on July 23.

The bank had slashed borrowing costs to 0.50 per cent in March 2009, when it also launched the radical QE policy to stimulate economic growth.

However, Britain's economy emerged from recession in the second half of 2009, after a fierce downturn rooted in the global financial crisis, and has since recovered somewhat.

The economy powered ahead with 0.8 per cent growth in the first quarter of 2014 compared with output in the final three months of last year.

However, analysts argue that easing inflation may persuade policymakers to keep record-low rates for the time being.

"Although the economic recovery appears to be heading into the second half of this year with plenty of momentum, the continued weakening of inflationary pressures suggests that today's decision by the MPC to leave interest rates on hold is likely to be repeated throughout 2014," said Capital Economics analyst Samuel Tombs.

Consumer prices have been sliding in Britain, with 12-month inflation slowing to 1.5 per cent in May -- the lowest level for four and a half years.