NCSC to work with Bank of England

The Bank of England has revealed that it could keep interest rates at a record low, for a lot longer than anticipated, as the economic recovery is weaker than expected.

In a speech to local business leaders in Kenilworth, central England, the BoE's chief economist Andy Haldane said weaker global economic growth, stagnant UK wages and productivity and increased political risks, will all contribute to keeping an inevitable interest rate hike at bay.

"Put in rather plainer English, I am gloomier," said Haldane, in response to questions over this view of the British economy.

"This implies interest rates could remain lower for longer, certainly than I had expected three months ago. If there is genuine uncertainty about the path of the economy, the optimal policy response may be to avoid the worst outcomes."

"Britain's economy is writhing in both agony and ecstasy."

UK interest rates have stayed at a record low of 0.5% for over five and a half years however market consensus viewed an impending rise in the first quarter of 2015.

Originally, BoE governor Mark Carney said that he would possibly hike rates if the unemployment rate fell below 7%.

He later dropped this forward guidance this year and, as of 16 October, the Office for National Statistics reported that the jobless rate was now at 6% - the lowest level since late 2008.

However, pay including bonuses for employees in the UK was 0.7% higher than a year earlier and wages excluding bonuses for employees in UK was 0.9% higher than last year.

In comparison, Consumer Prices Index inflation grew by 1.2% in the year to September 2014.

The figures mean that average total pay (including bonuses) for employees in UK was £479 ($762, €601) per week before tax and other deductions from pay.