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Mark Carney: Brits should enjoy low inflation while it lasts

Governor Mark Carney has said people should 'enjoy the low inflation while it lasts' as the Bank of England will bring inflation up to the 2% target by the end of the year.

We expect inflation to be very low over the next few months. But over the course of the year as we get towards the end inflation should start to pick up towards our 2% target.

The British people should enjoy this period of very low energy prices low, very low food prices, enjoy it while it lasts.

– Mark Carney

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Mark Carney: EU referendum 'should happen soon'

An referendum on the UK's membership of the European Union should take place "as soon as necessary", the Bank of England governor has said.

Mark Carney said businesses are continuing to invest and hire despite political uncertainty connected to either the recent election or future referendum but added that: "It's in the interests of everybody that there is clarity about the process and the question and the decision."

The Conservatives have pledged to have a vote on the issue before the end of 2017. Asked if the referendum had resulted in uncertainty among business bosses, Mr Carney told BBC Radio 4's Today programme:

We talk to a lot of bosses and there has been an awareness of some of this political uncertainty - whether because of the election or because of the referendum.

What they've been telling us, and we see it in the statistics, is they have not yet acted on that uncertainty - or to put it another way, they are continuing to invest, they are continuing to hire.

– Mark Carney

Asked why productivity has not therefore increased, Mr Carney said: "It should start to move up.

"One of the big advantages this economy has is access to the European market. It's the largest economy in the world, it's our largest per destination, it's our largest investor in the United Kingdom."

Asked if he meant he would like to see the referendum sooner rather than later, Mr Carney said: "As soon as necessary. That's as much as you're going to get."

Bank of England keeps interest rates at historic low

Interest rates have been held at their historic low of 0.5% as the Bank of England announced the result of deliberations concluded last week..

Rates have been at their current level for six years, with the recent slide in inflation to zero pushing back expectations for the timing of an increase into 2016.

The Bank of England has held interest at the current rate for six years Credit: PA wire

The Bank's monetary policy committee (MPC) announced its decision today after meeting on Thursday - polling day - and again on Friday morning.

More insight into the Bank's thinking will emerge this week with its quarterly inflation report and a second letter from governor Mark Carney to the Chancellor explaining why inflation is more than 1% off its 2% target

Bank of England set to leave interest rates unchanged

Bank of England governor Mark Carney has written to the Chancellor to explain why inflation is more than 1% off its 2% target Credit: Anthony Devlin / PA Wire/PA Images

Interest rates look set to stay on hold at 0.5% on Monday when the Bank of England announces its first post-election policy decision.

Rates have been at the historic low for six years and the slide in inflation to zero has pushed back expectations for the timing of a hike into 2016.

The Bank's Monetary Policy Committee (MPC) will announce its latest decision tomorrow having met on the day of the poll on Thursday and on Friday.

Meanwhile minutes of the April meeting of the Monetary Policy Committee (MPC) suggested a "hawkish" turn as it pointed to the possibility that inflation might recover more quickly than previously expected.

Consumer Price Index (CPI) inflation was at zero in February and March - rather than turning negative as some expected - meaning it might now have avoided this risk.

The Bank has said it expects CPI, which has been under pressure amid the sliding cost of oil and the supermarket price war, to turn negative "at some point the coming months".

However the latest meeting also said another cause of low inflation - the strength of the pound making imports cheaper - may have been feeding through to CPI more quickly than expected - meaning that a bounce-back could also come sooner.

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No change in interest rates or quantitative easing

No change in interest rates or quantitative easing Credit: Anthony Devlin/PA Wire

The Bank of England left interest rates on hold at 0.5% today.

The decision means the UK has now seen six years of rates at their current level, since they were slashed in March 2009.

The Bank also left the scale of its quantitative easing (QE) programme to boost the money supply unchanged at £375 billion.

Treasury to sell of remaining Lloyds Bank stake

The Treasury will begin to sell off part of its remaining stake in Lloyds Banking Group within days, according a plan launched by Chancellor George Osborne.

ITV News Business Editor Joel Hills reports:

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