Bank of England: No Further QE

The Bank of England’s Monetary Policy Committee has voted against further quantitative easing and to maintain an interest rate of 0.5%, which has been in place since March 2009.

Known officially as the Bank Rate, interest is applicable to commercial bank reserves and has never been lower than 0.5% in the Bank’s 319-year history.

Business leaders in the UK had expected the BoE to maintain the interest rate with Anna Leach, of the Confederation of British Industry, commenting that a “change in monetary policy was unlikely this month, given the UK economy continues to send out mixed signals”.

Following poor UK PMI figures, which signal a contraction in economic activity, Ms. Leach argues that the “underlying economic conditions remain fairly flat and there are early signs that credit availability is being boosted by the Funding for Lending Scheme ” and the CBI are “not expecting any change in monetary policy over the next few months, unless compelling evidence of a renewed downturn emerges”.

The BoE had previously raised concerns that the Q4 figures for 2012 will show contraction, potentially leading to a triple-dip recession.

The full details of Wednesday’s Monetary Policy Committee meeting will be released at 9:30 on Wednesday 23^rd January.

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