2:37pm UK, Thursday September 10, 2009

The Bank of England has - as expected - opted to keep the interest rate unchanged at 0.5%.

Bank of England

A low interest rate will encourage spending and recovery, say experts

The move follows a raft of good news on the economy, suggesting Britain may be emerging from recession.

Sky's Money Panel had predicted the rate would stay at its current level amid fears a rise would kill hopes of a recovery.

The Bank also decided to leave its quantitative easing (QE) programme to boost the money supply unchanged at £175bn.

The Monetary Policy Committee (MPC) expanded its QE programme by £50bn last month.

Bank governor Mervyn King had proposed an extra £75bn in fiscal stimulus but was outvoted by the committee.

And he has now come under fire from former rate-setter David Blanchflower.

Mr Blanchflower called the governor "old iron fist" and attacked a passive MPC's focus on inflation targets while the economy spluttered to a halt.

Having warned that Britain was set to be hit by recession, he said too little was done too late.