Citi: UK interest rates to remain ultra low until 2017

UK interest rates will stay at historic lows for four more years as the economy struggles to return to normal growth levels, Citi has predicted.

The investment bank said it expects the Bank of England to maintain rates at 0.5% until mid-2017, the Mail reports. The central bank cut rates to this level in March 2009 at the height of the financial crisis. Citi cut its 2013 growth forecast from 0.8% to 0.4% and said output will rise by only between 0.5% and 1% in 2014 – far below the Treasury’s estimates. It said the Bank of England will leave interest rates at 0.5% until mid-2017 – a year longer than expected – as it battles to restore the economy to health. Citi also said it expects ratings agencies could strip the UK of i...