Bank of England keeps interest rate, stimulus unchanged
03 Aug 2012
UK's central bank has kept on hold key interest rate at a record low of 0.5 per cent yesterday and maintained the level of quantitative easing (QE) despite concerns over a deepening recession in Europe's third-largest economy.
''The Bank of England's Monetary Policy Committee (MPC) today voted to maintain the official bank rate paid on commercial bank reserves at 0.5 per cent. The committee also voted to continue with its programme of asset purchases totaling £375 billion, financed by the issuance of central bank reserves,'' a BoE release said.
In July, the MPC decided to increase the QE by £50 billion to a total of £375 billion and expects that it will take another three months to complete the programme.
Last time the key interest rate was changed was in March 2009, at the onset of the global economic downturn when the rate was brought down to a record low level of 0.5 per cent from 1 per cent.
The committee's latest inflation and output projections will be released next week.
Further to the BoE's policy move, the European Central Bank also said yesterday that it would maintain the eurozone benchmark interest rate at a record low level of 0.75 per cent.
