Base rate stays at 0.50% - Money - News - Moneyfacts


Base rate stays at 0.50%

Base rate stays at 0.50%

Category: Money

Updated: 11/07/2012
First Published: 05/07/2012

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The Bank of England's Monetary Policy Committee has voted to keep base rate on hold at 0.50%, its 40th consecutive month.

The Bank has also announced that an additional £50 billion will be injected into the economy bringing the total size of its asset purchase, or quantitative easing (QE), programme to £375 billion. The stimulus currently stands at £325 billion.

This is the latest wave of QE announced by the Government, aimed at reviving consumer spending and economic growth and it is believed that it will be used by November this year.

In March 2009, when base rate last moved, the Bank pumped £75 billion into the economy in an attempt to kick-start it. Later that year the stimulus increased to £200 billion. In October 2011 the Bank announced that another £50 billion would be injected, with the same amount added in February this year.

Previous to March 2009, the practice of QE had not been used in the UK .

A statement released by the Bank of England stated that: " UK output has barely grown for a year and a half and is estimated to have fallen in both of the past two quarters. The pace of expansion in most of the United Kingdom 's main export markets also appears to have slowed. Business indicators point to a continuation of that weakness in the near term, both at home and abroad."

Chris Williamson, chief economist at financial data provider Markit, said: "The labour market is also showing signs of losing momentum, having enjoyed a solid performance earlier in the year. The concern is, however, that more quantitative easing will have a diminished impact compared to previous bouts of money printing.

"Despite this worry, it seems likely that the MPC will vote for more quantitative easing at its July meeting, adding a further £50bn to the existing £325bn stimulus, if nothing else to provide a boost to business and consumer confidence and keep government borrowing costs down."

Find the best savings rates for you - Compare savings accounts

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

77% of Christmas gifts unwanted

Research from Policy Expert has revealed that while Brits spend an average of £424 on presents for friends and family, more than three quarters (77%) of these gifts may be unwanted.

New Year tips to improve children’s money skills

How many have better budgeting as their New Year’s resolution? As with many things, these skills are best learned when young, so Lemonade Money has come up with some tips to help parents make their children more financially savvy.

Money worries lead to Christmas on credit

Money worries are putting Christmas at risk for up to five million Brits, with 10% saying they regularly worry about money in the lead up to Christmas, and the same proportion feeling stressed about how much they are spending.