INTEREST rates will stay at 0.5 per cent the Bank of England confirmed yesterday as policymakers met for the first time since Britain officially emerged from its six-year downturn.

There had been speculation that some rate-setters on the Bank’s nine-member monetary policy committee might have voted for a rise.

Second-quarter gross domestic product figures last month showed that Britain had finally begun to emerge from its worst downturn since the second world war as output surpassed its pre-recession peak in early 2008.

However, there have been conflicting signals from the labour market.

While overall employment has grown, weak wage growth of just 0.3 per cent compared to inflation of 1.9 per cent, means real-terms pay is continuing to fall.

“Unemployment may have fallen, but the jobs market is still weaker than before the crash,” said TUC general secretary Frances O’Grady.

“Real wages have now been falling for over four years and in recent months pay settlements have been falling.”