RTTNews - Thursday, the Bank of England decided to hold its key interest rate at a record low and to raise the size of quantitative easing measures.
At the end of the two-day rate setting meeting, the Monetary Policy Committee of the Bank of England voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The rate now stands at the lowest since the central bank was established in 1694.
The MPC also decided to raise the size of the asset purchases using the central bank reserves by GBP 50 billion to GBP 175 billion. The Committee expects the announced asset purchase programme to take another three months to complete. The scale of the programme will be kept under review, the central bank said in a statement.
In order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that maintaining Bank Rate at 0.5% was appropriate.
The world economy remains in recession, though there have been increasing signs that output in the UK's main export markets is stabilizing, the central bank said. In the United Kingdom, the recession appears to have been deeper than previously thought. GDP fell further in the second quarter of 2009.
But the pace of contraction has moderated and business surveys suggest that the trough in output is close at hand.
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