UK interest rates to stay at 0.5% until 2017

UK Britain Union Jack Bunting 480

UK interest rates will stay at rock bottom per cent for another four years as the economy struggles to recover, according to a leading investment bank.

Citi says it expects rates to stay at 0.5 per cent until the middle of 2017 – a year longer than previously expected, according to The Mail.

The prediction would see interest rates held at 0.5 per cent for eight years, having been cut to the low back in March 2009.

Citi has also cuts its growth forecast for the UK in 2013 from 0.8 to 0.4 per cent and said output would only rise between 0.5 and 1 per cent in 2014.

Citi chief UK economist Michael Saunders says: “We think the UK will lose its AAA rating in 2013. The economy is likely to disappoint again in 2013. We expect that growth will stay weak in 2014.”