As political uncertainty grows as a result of last week’s election resulting in a “hung” parliament, the Bank of England announced that benchmark lending rates will remain at 0.5 percent. The Bank also noted the recent increase in prices and the potential for inflation, but has opted to maintain its quantitative asset purchasing targets unchanged until the economy shows greater strength.
The announcement comes in the middle of talks between David Cameron’s center-right Conservatives, and the smaller Liberal Democrats to form a coalition government. The Conservatives won the most seats in last week’s election, but failed to secure a majority win over the long-time Labour party.
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