The Bank of England has announced that the base rate of interest will remain unchanged, at 0.5%, for the forth consecutive month. The news was welcomed by debt management specialists, since financial stability and lower mortgage costs will help financially overcommitted consumers.

There are many tens of thousand of indebted consumers that have signed on to a Debt Management Plan, or an IVA, in the wake of the current recession. Anything that can be done to keep their necessity expenses to a minimum can only help them to clear their unsecured debts.

The bank went on to say that they have no plans to increase the quantitative easing scheme, which is where the bank effectively creates money with which to buy bonds in a hope that this will stimulate the recessed economy. The current plan is to inject £125 billion into the economy, and they are only £15 billion short of achieving that aim. It was widely thought that the Bank’s Monetary Policy Committee would extend the scheme up to £150 billion, without consulting with the Treasury; however it appears that this is not the case.

The bank did not extend the quantitative easing scheme this month because they want to see if the scheme has had any effect on the economy. The British Chambers of Commerce (BCC) was unhappy about the decision, and thought the bank should have used the extra money that it has available as an economic stimulus. The BCC called for the government to extend the scheme up to £200 billion.

Earlier in the week, the BCC business group said that the UK has now seen the worst of the recession, but added that talk of the green shoots of recovery was perhaps a little premature. The latest official figures showed that the UK economy shrank by 2.4% in the first quarter of 2009, which is a record for more than 50 years.

In addition to this, the jobless total rose to 2.26m in the period February to April, which is the highest it has been since the end of 1996.