By Business Editor Trevor Sturgess

The cost of borrowing remained unchanged after the Bank of England held the base rate at the historic low of 0.5 per cent.

But the Bank confirmed that it was raising the size of its asset purchase programme - so-called quantitative easing - by £50bn to £125bn.

As widely expected, the Bank’s Monetary Policy Committee decided that the current rate, fixed in March, was "appropriate."

It said the world economy remained in deep recession, with falling output and international trade that had "fallen precipitously."

"The global banking and financial system remains fragile despite further significant intervention by the authorities," it said.

While GDP (gross domestic product) fell sharply in the first quarter of 2009, there were promising signs at home and abroad that the pace of decline was slowing.

The Bank forecast that consumer price inflation was likely to drop below the two per cent target later this year, as food and energy prices fell back.

It thought that various fiscal stimulus measures would lead to recovery in economic growth but said the timing and strength of that recovery was uncertain.

James Thomas, of Jones Lang LaSalle, the property experts that manage Kent Science Park, Sittingbourne, said mortgage approvals had risen and that lower interest rates were encouraging more people back into the market.

His colleague Paul Guest said demand for commercial property remained weak, with further rental declines expected.

But, he added, "there are tentative signs that the prime end of the market may be stabilising as savvy investors are taking advantage of the attractive pricing to enter the market."