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Bank of England sticks with the status quo as rates stay on hold
THE Bank of England’s monetary policy committee (MPC) unsurprisingly kept interest rates at 0.5 per cent and quantitative easing on hold at £175bn yesterday.
The Bank has purchased almost £146bn worth of assets and said it expects the programme to take another two months to complete. Although there were calls last month to extend QE to £200bn, most economists do not see any further changes to the policy until November.
But Henderson New Star’s Simon Ward said there were reasons for thinking the modest pace of monetary expansion was consistent with a solid recovery in 2010. “The MPC should be cautious about expanding asset purchases any further, particularly given uncertainty about the lagged effects of buying to date,” he said.