Bank of England Maintains Bank Rate at 0.5%

Maintaining the official Bank Rate paid on commercial bank reserves at 0.5%, the Bank of England’s Monetary Policy Committee has warned that “the world economy remains in recession, though there have been increasing signs that output in the UK’s main export markets is stabilising”.
In a statement published today, the BoE made clear that, even if banks’ funding conditions have improved a little and business confidence has picked up, financial conditions remain fragile. And though there are signs that credit conditions may have started to ease, lending to business has fallen and spreads on bank loans remain elevated.
According to the statement, “the need for banks to continue repairing their balance sheets is likely to restrict the availability of credit”, impacting adversely on the supply capacity of the economy.