Bank of England holds rates at 0.5%

by Richard Kilner

Story link: Bank of England holds rates at 0.5%

The Bank of England’s Monetary Policy Committee (MPC) has today elected to retain the interest rate at 0.5%.

The last time the interest rate, at a historically low level, was altered was in March when it was slashed by 50 basis points.

The MPC has also chosen to continue with the programme of asset purchase quantitative easing (effectively printing money) by expanding the programme by £50bn to £175bn.

The programme is forecast to be completed within three months, and the scale of the asset purchase scheme stays under review.

This marks a change from last month, when the Bank of England stated that the original £125bn asset purchase programme would be completed by now.

In a statement the Bank of England opined that the world recession continues but signs of stabilisation are becoming visible, and confidence amongst consumers and businesses is beginning to pick up.

The UK remains in recession also, and although GDP continues to shrink the rate of contraction has reduced.