The Bank of England has continued to hold UK interest rates at a record low of 0.5% and is not extending its quantitative easing programme (QE).

QE is the Bank's scheme to boost the economy by buying bonds. In February, the Bank's Monetary Policy Committee (MPC) boosted the stimulus to £325bn.

Rates have been at 0.5% for three years, despite persistent inflation.

In March, the Consumer Prices Index (CPI) measure of inflation rose to 3.5%, from 3.4% in February.

CPI inflation has been running above the Bank of England's target rate of 2% for 28 months.

Minutes from April's meeting of the MPC showed that policy makers were becoming more concerned about inflation.

One member of the committee, Adam Posen, dropped his vote for more QE.

With the economy back in recession, some economists believe that the Bank will have to extend the QE programme.

"The combination of sluggish activity and sticky inflation put the MPC in a difficult position, and this decision is likely to have been a close call," said Ian McCafferty, chief economic adviser to the CBI.

House prices are in gentle decline, new figures from the Nationwide building society suggest.

Its latest monthly survey says prices dropped by 0.2% in April, leaving them 0.9% down on a year ago.

The Nationwide said prices had fallen four times in the past five months to leave the average price at £164,134.

On Wednesday, figures from the Bank of England suggested that the brief rise in mortgage lending at the start of the year had now come to an end.

And on Monday, the Land Registry for England and Wales also said house prices had dropped slightly in March.

It said they fell by 0.6% during the month, which also left them 0.6% down from a year ago.

Robert Gardner, the Nationwide's chief economist, warned that the next few months were unlikely to see a revival of either sales or prices.

"Much of the recent softness in measures of housing market activity and house prices is likely to relate to the expiry of the stamp duty holiday in late March," he said.

"This provided a temporary boost to house prices in early 2012 as buyers brought forward purchases that would otherwise have taken place later in the year.

"This effect should fade in the months ahead, and measures such as the Government's NewBuy scheme should provide some support to buyer demand," he added.

Earlier this week more than a million borrowers started to pay higher rates of interest on their mortgages.

Several lenders - the Halifax, the Co-operative Bank, and the Clydesdale and Yorkshire Banks - have imposed increases in their standard variable rates for existing borrowers.

They have argued that they have to charge more to existing customers, to offset the increasing cost of raising wholesale funds on the financial markets.

UK house prices fell by 0.5% in February compared with the previous month, according to the latest survey from the Halifax.

The lender, now part of Lloyds Banking Group, said that the value of the average home in the UK had dropped by 1.9% from a year earlier.

That meant the average home now cost £160,118, the Halifax said.

It said that "significant uncertainties" faced the outlook for house prices during the rest of 2012.

The prospects for property prices depended on events in the eurozone and the potential knock-on effects on the UK, according to Halifax's housing economist Martin Ellis.

February's fall in property values came after a 0.6% rise in prices during January, the Halifax data shows.

The three-month on three-month measure, seen as a less volatile indication of house prices, showed a 1.1% drop in February.

Mr Ellis said prices were broadly similar to last spring, owing to low interest rates maintaining housing demand and the supply of homes coming onto the market remaining tight.

He added that the falling rate of inflation should relieve some pressure on household finances.

However, the Halifax, which is the UK's biggest mortgage lender, confirmed at the weekend that it is to raise its standard variable mortgage rate (SVR) from 1 May.

It said the rise - from 3.5% to 3.99% - was due to the higher cost of raising funds for mortgages from both savers and the financial markets.

Northern Rock is expected to return a profit of up to £11bn to the taxpayer over the next 10 to 15 years, the body which manages the government's bank investments has said.

The government provided £37bn of funding to bail out the two companies that comprise the former Northern Rock.

UKFI now says that the return of cash from the two companies is expected to total between £46bn and £48bn.

Northern Rock was nationalised in 2008 after struggling in the credit crunch.

After experiencing funding problems when banks stopped lending to each other in 2007, the Newcastle-based lender suffered the first run on a British bank in more than a century.

It was later split into two, Northern Rock plc and Northern Rock (Asset Management), into which was placed its bad debt.

In November 2011, the government announced the sale of Northern Rock plc to Virgin Money for £747m.

UKFI said that the expected cash return included the recent sale, as well as loan repayments, interest, guarantee fees and the winding-down of Northern Rock (Asset Management).

"This means that, in cash terms, the companies are expected to more than repay the original funding provided by the taxpayer," UKFI said.

"However, this cash is expected to be returned over a period of around 10 to 15 years from 2012 as Northern Rock (Asset Management) plc is run down and the remaining government loan is repaid.

"This is equivalent to receiving an annual rate of return on the government's intervention of 3.5% to 4.5% per year and compares to the government's estimated notional annual funding costs during the period of intervention of 3.9%."

UK mortgage lending picked up in January compared with the same month a year earlier, lenders' figures show.

However, the usual seasonal fall meant lending was down on December, the Council of Mortgage Lenders (CML) said.

Gross mortgage lending stood at £10.5bn in January, down 12% on December but up 10% on January 2011.

This was the sixth month in a row of higher year-on-year lending, the CML said, but it warned that this was from very low levels of activity.

"The recent improvement in housing and mortgage market sentiment is welcome," said CML chief economist Bob Pannell.

"But we should be careful not to overstate its significance, given the very low levels of activity we are starting from and the protracted and difficult economic rebalancing that the UK and other countries have embarked upon."

Some of the extra activity could be the result of first-time buyers trying to get onto the housing ladder before the stamp-duty concession ended, Mr Pannell added.

The 1% stamp duty rate for first-time buyers, on properties worth between £125,000 and £250,000, is being reintroduced on 24 March.

Last week, the Royal Institution of Chartered Surveyors reported that its members expected sales of homes in England and Wales to rise in the final weeks of a stamp duty holiday.

Meanwhile, the CML said that the falling inflation rate, were it to continue, would reduce the squeeze on household finances and assist activity in the housing market in the future.

The Bank of England has agreed to extend its quantitative easing (QE) programme by £50bn to give a further boost to the UK economy.

When completed, it will bring the total amount of QE stimulus to £325bn.

The Bank started its QE programme, through which it buys mainly government-issued bonds, freeing up cash for lending, in 2009.

The Bank's Monetary Policy Committee (MPC) also said it would keep interest rates at their record low of 0.5%.

UK interest rates have been held at that level since March 2009.

The BBC's economics editor, Stephanie Flanders, said the £275bn of QE undertaken so far was an amount equivalent to nearly 20% of the country's gross domestic product.

Inititally, experts were predicting an extra of £75bn of QE, but this figure was reduced to £50bn when economic surveys released last week indicated that the manufacturing and service sectors had performed better than expected in January.

However, concerns remain over weak consumer spending and the eurozone crisis.

The Bank said in a statement: "The underlying pace of recovery slowed during 2011, with activity falling slightly during the final quarter.

UK house prices increased by 0.6% in January, according to the latest survey from the Halifax.

The change means that the average cost of a house was £160,907 last month, the bank said.

House prices are 1.8% lower than a year ago, according to the Halifax's measure.

The bank said prospects for the housing market over the coming months depended on whether the debt crisis in the eurozone would affect the UK economy.

"If the UK can avoid a prolonged recession, we expect broad stability in house prices in 2012," said Martin Ellis, Halifax's housing economist.

The Halifax, now part of Lloyds Banking Group, said that the price of the average home in the UK was very similar to the average value in the middle of 2011.

This had held up owing to the low level of interest rates, the lender said.

And Tracy Kellett, managing director of UK buying agent BDI Home Finders, said: "House prices are being held artificially high by two key factors - an extreme lack of stock and historically low interest rates.

"Throughout 2012, we are likely to see a further widening of the north-south divide. Prices will be hit hardest where the economy is feeling it the hardest."

House prices in the three months to January fell by 0.9% when compared with the previous three months, the Halifax said. This three-month on three-month comparison is often thought to be a better measure of underlying conditions in the market.

Last week, the latest survey from the Nationwide building society valued the average home at £162,228. It said that prices fell by 0.2% in January compared with December.

The Nationwide said the annual rise in house prices in January was 0.6%, notably different to the 1.8% fall recorded by the Halifax.

However, the year-on-year comparison is calculated slightly differently by the two lenders. The Halifax compares the previous three months with the same three months a year earlier to give a smoother comparison, rather than a direct comparison of the equivalent months.