The London Daily News

03 May, 2011 08:20 (GMT +01:00)

No rise in interest rates, Bank of England chief warns of risk to economy of hikes

City News Desk

The Governor of the Bank of England Mervyn King has said that the high level of debts across Europe pose "massive" challenges, and if interest were to go up the problems would be made worse; signalling that the Monetary Policy Committee will again back away from increasing the historic 0.5 % in interest rates.

Speaking to the European Parliament the Governor of the Bank of England Mervyn King said:

"The economic consequences of high-level indebtedness now would become even more severe if rates were to rise".

Commenting on the financial crisis affecting the Euro-zone economies Mervyn King said:

"The economic challenges will last for many years, the financial crisis is far from over".

The "anemic" growth figures of the UK economy with recent GDP figures showing a 0.5pc rise in the economy between January and March, destroyed any chance of a May rate rise, according to a repot in the Daily Telegraph today.

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