Quantitative easing and low interest rates to stay, says BDO Stoy Hayward

THE 0.5 per cent basic rate of interest is here to stay until at least the end of 2010, while quantitative easing will also continue, accountancy firm BDO Stoy Hayward predicted yesterday.<br /><br />The company&rsquo;s latest Business Trends report envisages a continuation of the Bank of England&rsquo;s current monetary policy to counterbalance low inflation and the likelihood of increased taxes.<br /><br />The BDO Inflation Index shows that price pressures remain low, with the index up to 92.0 in August from 91.0 in July, which BDO said meant that &ldquo;Bank of England governor Mervyn King will have licence to print more money and keep interest rates at 0.5 per cent well into 2010&rdquo;.<br /><br />Peter Hemington, partner at BDO Stoy Hayward, said: &ldquo;Consumer spending has helped keep the economy afloat but the chancellor will have to throw consumers a life raft in 2010.&rdquo;<br /><br />&ldquo;This means a continuation of quantitative easing and low interest rates is almost inevitable.&rdquo;