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Bank of England holds rates

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07/12/2012
The Bank of England has held the base interest rate at 0.5%.

The historically low rate has been in place since March 2009.

The Monetary Policy Committee (MPC) also voted against additional quantitative easing beyond the current £375bn already announced.

The minutes of the last MPC meeting, held on 7 and 8 November, reveal David Miles was the only member calling for a boost to the Bank of England’s QE programme.

Miles was the only one of the nine members to vote for an additional £25bn of QE, which would take the total size of the asset purchase scheme to £400bn.

Last month Miles said the Bank still has more QE firepower in its arsenal.

“We may need more stimulus. That will depend on how the headwinds holding back growth play out,” he told the Telegraph.

Miles said there could shortly be some positive impact from the BoE’s Funding for Lending scheme, put in place to make loans cheaper and more plentiful.

However, he added: “If it turns out that not enough has been done, that the economy is going to stay in a recessionary state and that is going to drive inflation down, there is more we can do. We have not run out of ammunition.”

 

 

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