Bank of England leaves rates at 0.5%

by Richard Kilner

Story link: Bank of England leaves rates at 0.5%

The Monetary Policy Committee (MPC) of the Bank of England has elected to retain the interest rate at 0.5%, the lowest in the history of the institution.

The MPC has also chosen to continue with the implementation of quantitative easing (printing money) via its £125bn asset purchase scheme.

The scheme is forecast to be completed in approximately a month.

The last time the interest rate was altered was in March of this year, when it was cut by 50 basis points to the present level.

There has been some conflict in the past month between Governor Mervyn King and Chancellor Alistair Darling regarding the powers of the Bank of England.

In addition to the usual monetary tool of interest rates and the extraordinary steps taken in the quantitative easing programme (the first of its kind in British history) the Governor has made it plain he wants more powers.

Yesterday the Chancellor unveiled a new banking regulation framework which will enhance the Bank of England’s powers but retain the tripartite system that the Opposition has stated it would axe.