Bank of England keeps interest rates at record low

[June 04, 2009]  LONDON (AP) -- The Bank of England has kept official interest rates at a record low of 0.5 percent and maintained its policy of increasing the money supply to the economy.

With early -- but tentative -- signs of an economic recovery on the horizon, the bank's decision on Thursday represents a cautious stance.

Even as recent statistics show improvement across much of the economy, bank governor Mervyn King has warned that the road to recovery will be longer and harder than anticipated.

The central bank last month expanded its 'quantitative easing' program of pumping newly created money into the economy by buying government and corporate bonds. It last month increased the size of the program by 50 billion pounds ($75.4 billion) to 125 billion pounds.

[Associated Press]

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