The Bank of England is expected to announce interest rates will be held at 0.5 per cent later today.

The Bank’s monetary policy committee (MPC) will announce its decision and an update on the ongoing quantitative easing at 12:00 BST.

Ever since March, rates have been held at their record low, with some analysts predicting them to stay at that level for the remainder of the year.

Last month, the MPC announced an extra £50 billion in quantitative easing, following the decision in March to start the first tranche of a £75 billion spending programme to help boost the economy and counter expected deflation.

Commenting ahead of today’s decision, David Kern, chief economist at the British Chambers of Commerce (BCC), said: “We expect the MPC to keep interest rates on hold and to persevere with aggressive quantitative easing.

“There are still serious risks facing the economy and businesses are under huge pressure.

“Higher share prices and trickles of positive news do not guarantee recovery. More forceful measures are needed to alleviate the recession. The moderation in the pace of economic decline must be sustained and nurtured.”

He added the MPC needed to “up the tempo” at which the asset purchase programme was executed and increase its size beyond £125 billion.

Recent figures on the growth of the broad money supply – known as M4 – in the economy show cash created by the MPC is yet to filter through.

M4 rose by 0.2 per cent in April, the smallest increase since October 2007.

Although massive increases in the money supply were not expected so early, initial signs of growth had been predicted.

The upshot for the Bank of England is that it may either boost its spending further – up to £150 billion – or change the tack of the quantitative easing programme.

Currently the MPC is mostly buying government bonds – or gilts – on the open market along with some corporate bonds and short-term corporate loans.

The lack of expansion in the money supply – which is hoped will boost the economy and turn around deflation – has led to some criticism of those selling bonds for not passing on the extra cash into the economy.