The Bank of England (BoE) released its monetary policy report for May 2021 in which they confirmed interest rates would be kept at 0.1%.

It also said it would keep quantitative easing at its current total, £895 billion, a process that involves the BoE creating new digital money that it uses to buy bonds from the private sector, increasing investment and lending.

The BoE started the monetary policy in March 2009 after the financial crisis, pumping a newly generated £200bn in the economy.

Low interest rates and the extra money in circulation should incentivise increased spending and investment in the country, according to the BoE.

With more money in circulation, it also hopes that the inflation rate will climb to the BoE's target of 2%.

The report predicts that inflation will reach 1.7% in Q2 2021 and 2.3% in Q2 2022 before settling at 2.0% in Q2 2023.

Inflation has been low during the pandemic and is currently at 1% according to the Office for National Statistics, which the BoE said is a result of slow growth.

The Bank will review interest rates on 24 June 2021.

Talk to us about interest rates.