MPC maintains interest rates at 0.5% - Economy - News - Moneyfacts

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MPC maintains interest rates at 0.5%

MPC maintains interest rates at 0.5%

Category: Economy

Updated: 10/05/2012
First Published: 10/05/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

There was no shock announcement from the Bank of England's rate-setting committee at noon today, as interest rates remain on hold at 0.5%.

The measure has remained at the current historic low since the Monetary Policy Committee (MPC) cut the Bank base rate of interest from 1.0% to 0.5% in March 2009.

The MPC also said it would not be increasing the size of the quantitative easing (QE) initiative this month.

In February, the Bank injected another £50 billion into the economy, taking the size of the QE programme so far to £325 billion.

Minutes of the meeting released later this month will show how the group voted; in recent months, both Adam Posen and David Miles have voted to further increase the size of the initiative.

However, Mr Posen voted to maintain QE in April and is likely to have done so again this month.

"In terms of whether any policy action was required today, MPC members are unlikely to have spent much, if any, time discussing whether to change Bank Rate," said Ray Boulger of John Charcol.

"The only decisions requiring any serious consideration were whether to add to the current £325 billion of QE and what comments to record in order to pad out the minutes.

"As the economic outlook in both the UK and the Eurozone has deteriorated over the last month it would not be surprising if David Miles was not alone this month in voting for some additional QE."

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