The Bank of England yesterday decided to continue the three-year low level of interest rates.

The decision marked three years since rates were cut to the 0.5% record low, and many analysts expect that to continue for at least another year.

The BoE's monetary policy committee also decided to make no change to its quantitative easing programme, which last month boosted the economy through spending £50bn on bonds in order to free cash for lending.

Bank of England governor, Mervyn King said he expected the UK economy to "zigzag" this year - dipping in and out of growth - but would avoid falling back into recession.

The Bank forecasts the economy will grow by about 1% this year and expects inflation will continue to fall in the coming months.