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04/02/2010
Interest Rates And 'Easing' Held
The Bank of England today held interest rates at 0.5%, with so-called 'quantitative easing' being mainted at £200 billion.
The UK officially climbed out of recession last month, following a 0.1% growth in output.
"After a substantial fall in output, the UK economy recorded sluggish growth in the final quarter of 2009," the bank said this morning.
Inflation has risen sharply to well above the 2% target, reaching 2.9% in December.
"That rise was largely accounted for by higher petrol price inflation and the reduction in the main VAT rate a year earlier dropping out of the calculation," said the Bank of England.
Inflation is predicted to have risen further in January, reflecting the restoration of the VAT rate to 17.5%.
The bank said credit conditions are likely to "remain restrictive", while the need to strengthen public and private sector finances will also "weigh on spending".
"In the light of the committee's latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the committee judged that it was appropriate to maintain Bank Rate at 0.5% and its stock of purchases of government and corporate debt financed by the issuance of central bank reserves at £200 billion," the Bank of England said.
It added that the committee will continue to monitor the appropriate scale of the asset purchase programme, and further purchases would be made should the outlook warrant them.
(PR/GK)
The UK officially climbed out of recession last month, following a 0.1% growth in output.
"After a substantial fall in output, the UK economy recorded sluggish growth in the final quarter of 2009," the bank said this morning.
Inflation has risen sharply to well above the 2% target, reaching 2.9% in December.
"That rise was largely accounted for by higher petrol price inflation and the reduction in the main VAT rate a year earlier dropping out of the calculation," said the Bank of England.
Inflation is predicted to have risen further in January, reflecting the restoration of the VAT rate to 17.5%.
The bank said credit conditions are likely to "remain restrictive", while the need to strengthen public and private sector finances will also "weigh on spending".
"In the light of the committee's latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the committee judged that it was appropriate to maintain Bank Rate at 0.5% and its stock of purchases of government and corporate debt financed by the issuance of central bank reserves at £200 billion," the Bank of England said.
It added that the committee will continue to monitor the appropriate scale of the asset purchase programme, and further purchases would be made should the outlook warrant them.
(PR/GK)
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The Bank of England Monetary Policy Committee (MPC) has kept interest rates on hold at 0.5% for the 18th month in a row. The decision had been expected, although there have been calls for a rise in order to curb inflation. The MPC also continued with the Bank's £200 billion quantitative easing programme. The UK economy grew by 1.
10 May 2007
Interest rates rise to 5.5%
The Bank of England has announced that interest rates will rise from 5.25% to 5.5%. The rise is the fourth since last August, bringing the cost of borrowing to its highest level since 2001. The rise has been expected by analysts in order to try and keep inflation down.
Interest rates rise to 5.5%
The Bank of England has announced that interest rates will rise from 5.25% to 5.5%. The rise is the fourth since last August, bringing the cost of borrowing to its highest level since 2001. The rise has been expected by analysts in order to try and keep inflation down.
07 December 2006
UK interest rates stay at 5%
The Bank of England has left interest rates unchanged at 5%. The news comes as no surprise to analysts as the decision was widely anticipated. The Bank of England's Monetary Policy Committee raised the interest rate in August and again in October in an effort to curb inflation, which is still running at above the government's target figure of 2%.
UK interest rates stay at 5%
The Bank of England has left interest rates unchanged at 5%. The news comes as no surprise to analysts as the decision was widely anticipated. The Bank of England's Monetary Policy Committee raised the interest rate in August and again in October in an effort to curb inflation, which is still running at above the government's target figure of 2%.
12 November 2003
Bank of England predicts 'modest' UK recovery
The Bank of England's latest quarterly report has forecast both growth in the economy and a rise in inflationary pressures within the economy. However, The Bank of England's Governor Mervyn King has warned that some homeowners may end up in a negative equity situation should UK interest rates continue to increase to hold inflation in check.
Bank of England predicts 'modest' UK recovery
The Bank of England's latest quarterly report has forecast both growth in the economy and a rise in inflationary pressures within the economy. However, The Bank of England's Governor Mervyn King has warned that some homeowners may end up in a negative equity situation should UK interest rates continue to increase to hold inflation in check.
17 June 2008
Consumer Inflation Has 'Risen Sharply', Says Bank Of England
The Governor of the Bank of England has written a letter of explanation to the Chancellor over the rising inflation figure. The inflation rate has soared to more than 3.3% - well above the Government's target of 2% - in figures released today.
Consumer Inflation Has 'Risen Sharply', Says Bank Of England
The Governor of the Bank of England has written a letter of explanation to the Chancellor over the rising inflation figure. The inflation rate has soared to more than 3.3% - well above the Government's target of 2% - in figures released today.
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