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Bank of England keeps rates on hold

London - The Bank of England kept interest rates at a record low on Thursday as policymakers gave more weight to the risks from low inflation and a weak global economic outlook than to a strong recovery at home.

The BoE's monetary policy committee, as expected, left its Bank rate at 0.5%, where it has been since the depths of the financial crisis nearly six years ago and made no statement.

Britain's consumer-led recovery looks set to slow down only modestly going into 2015, but economists and financial markets expect no rate hike until deep into next year.

Weak pay growth, inflation running well below the BoE's 2% target and a poor outlook for the euro zone have convinced most of the MPC's nine members to keep interest rates on hold.

Still, minutes from last month's meeting showed that some of the seven members who have been voting to keep rates on hold were increasingly worried about the risk of inflation pressures building up.

Britain looks set for more fiscal austerity in the coming years that may pressure the BoE to keep monetary policy loose.

Finance minister George Osborne's latest update to his austerity plans are set to take public spending as a share of the economy to its lowest level in 80 years, the country's fiscal watchdog said.


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