Shares rise after interest rates remain unchanged

The stock market, led by banking shares, saw a rise early this afternoon after the Bank of England left interest rates unchanged at 0.5 per cent. The move, which was expected, means rates remain at the same record low for the 16th consecutive month.

Banks, which should profit from the increased lending activity generated by keeping rates on hold,  led the rise. Lloyds was up 3.9 per cent, or 2.2 pence, to 60.4p. Royal Bank of Scotland gained 1.5p, or 3.7 per cent, to 44.42p, while Barclays added 8.6p, or 2.9 per cent, to 300.1p.

Graeme Leach, chief economist at the Institute of Directors, warned the UK economy was "still extremely fragile". He added: "With a severe fiscal tightening on the way, it is essential for monetary policy to support the recovery."

Read a full report at the Guardian. ·