The Bank of England today decided to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.
The Bank’s Monetary Policy Committee (MPC) also voted to continue with its programme of asset purchases totalling £175bn financed by the issuance of central bank reserves.
Commenting on the BOE’s statement, Ian McCafferty, Chief Economic Adviser at the CBI, the UK’s leading business organisation, said “It is not surprising that the Bank has chosen to keep things as they are, given the big decision on QE taken last month.
“The statement from the MPC today tells us relatively little, though the minutes released later this month should be more revealing. They may give an insight into the extent to which QE is having an impact, and whether the Bank feels that its measures, which help the commercial banks, are also feeding through to the wider economy”.
David Kern, Chief Economist at the British Chambers of Commerce (BCC), added: “Following last month’s welcome decision to increase quantitative easing to £175bn, we are not surprised that the MPC has chosen to persevere with the current programme and keep interest rates at 0.5%. However, persistent weakness in lending to businesses, particularly to small firms, poses serious risks to the early signs of economic recovery”.