The Bank of England kept interest rates on hold for the thirtieth consecutive month after the Monetary Policy Committee’s (MPC’s) September meeting. In addition, the size of the asset purchase facility (commonly known as quantitative easing) remained on hold at £200bn, where it has been since November 2009.

Scott Corfe, economist at the Centre for Economics and Business Research (Cebr), said: “The announcement follows a torrent of weak economic data and market volatility both in the UK and overseas. An increasing number of commentators are now talking about a negative quarter-on-quarter growth rate in Q3 2011.

“The economic data support the case for keeping interest rates at historically low levels, despite the fact that the latest inflation figures showed annual growth on the consumer price index (CPI) of 4.4% in July - over double the Bank of England’s central target of 2.0%.

“Indeed, monetary policy may need to be loosened still further if the economy continues to show signs of flat-lining over the coming month. An expansion in quantitative easing (QE) – effectively a loosening in monetary policy - looks increasingly likely in both the UK and the US, despite arguments that it is unlikely to solve the current economic malaise and its effects on the real economy are still unclear. Unfortunately, it is the only straightforward measure policymakers have left in the short term.”