BoE holds record-low interest rates
(7 October 2010 – UK) The Bank of England’s nine-member Monetary Policy Committee (MPC) has decided to keep interest rates at the record low level of 0.50 percent, however has opted against further cash injections.
The BoE maintained its quantitative easing (QE) program, under which it had injected about £200 billion (A$322 billion) into the economy.
Many analysts believe the BoE will have to revisit the radical QE policy, given the risks to Britain's recovery from a deep recession that ended in late 2009.
Also on Thursday, the European Central Bank (ECB) kept its key eurozone rate at an all-time low level of 1.0 percent.
IHS Global Insight economist Howard Archer told AFP that the Bank of England and the European Central Bank have both behaved as expected by keeping interest rates and all other aspects of monetary policy unchanged at their October policy meetings.
The BoE is coming under increasing pressure to revive QE in reaction to slowing UK growth and ongoing tight credit conditions, but most MPC members seem reluctant to do this for now at least, given stubbornly high consumer price inflation, Mr Archer said.
The ECB had already extended some of its emergency liquidity measures for banks to the end of the year at its September meeting, so was never likely to do anything, Mr Archer highlighted.
Many analysts believe the BoE will have to revisit the radical QE policy, given the risks to Britain's recovery from a deep recession that ended in late 2009.
Also on Thursday, the European Central Bank (ECB) kept its key eurozone rate at an all-time low level of 1.0 percent.
IHS Global Insight economist Howard Archer told AFP that the Bank of England and the European Central Bank have both behaved as expected by keeping interest rates and all other aspects of monetary policy unchanged at their October policy meetings.
The BoE is coming under increasing pressure to revive QE in reaction to slowing UK growth and ongoing tight credit conditions, but most MPC members seem reluctant to do this for now at least, given stubbornly high consumer price inflation, Mr Archer said.
The ECB had already extended some of its emergency liquidity measures for banks to the end of the year at its September meeting, so was never likely to do anything, Mr Archer highlighted.
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