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Bank keeps interest rates at 0.5% while Eurozone plot thickens

The Bank of England kept monetary policy the same yesterday, meaning that interest rates remained at 0.5 per cent, and the quantitative easing programme at £275 billion.

Meanwhile, all eyes are on the European summit, which has failed to come to a unanimous decision on tackling the debt crisis and preventing the implosion of the Euro.

Instead, the UK has refused to participate in a new treaty, and agreements made by other European leaders over night, that will see participating European countries coordinate their budgets and make sure there is more surveillance of what they do and the fiscal integration that they need.

Prime Minister David Cameron called the decision to remain outside of this new treaty a 'tough one', but argued that the safeguards on offer were insufficient, particularly considering that Britain remains outside the Euro, he said:

"The decisions taken here tonight all flow from one thing: the fact that there is a single currency in Europe - the euro. Britain is out of it, and will remain out of it. Other countries are in it and are having to make radical changes, including giving up sovereignty, to try and make it work.

"The difference between the "ins" and the "outs" - those in the euro and those out of the euro - has inevitably created some tensions within the European Union. Now there are arrangements in the EU treaties to allow different countries to do different things, but these have always been accompanied by adequate safeguards within the treaties.

"When we can't be given those safeguards in the treaty, it is better this is done by intergovernmental arrangements, outside the treaty and outside the institutions of the European Union. That is what will happen, and that is what is in Britain's national interests."

Meanwhile, the European Central Bank (ECB) has reduced the interest rate on the main refinancing operations of the Eurosystem will be decreased by 25 basis points to one per cent, in response to the current Eurozone situation.