Posted: 10th May 2012
The Bank of England's Monetary Policy Committee today voted to maintain interest rates at 0.5%.
Meanwhile, the Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £325 billion. In other words, it will not extend its controversial quantitative easing (QE) programme.
Commenting on the decision, Barry Naisbitt, chief economist at Santander UK, said that it was “expected”.
He said: “Given the reported fall in economic activity in the first quarter of this year and that the MPC increased quantitative easing in February, there was some speculation about whether the MPC would further increase its asset purchases.
“It did not, but it retains the ability to do so at a later date. With no policy change this month, the real focus will probably come with the Bank of England's Inflation Report which is published later this month. With inflation having edged up to 3.5% in March, it will be interesting to see if the Bank retains its view that inflation will fall to its 2% target by the end of this year.
“Further to that, given that last month one MPC member voted for more quantitative easing and that GDP fell by 0.2% in the first quarter, there will be interest in the minutes of today's meeting to see how many members of the committee voted to extend quantitative easing."
The minutes of the meeting will be published at 9.30am on Wednesday 23 May.
The previous change in interest rates was a reduction of 0.5 percentage points to 0.5% way back on 5 March 2009.