You are here: Home - Saving & Banking - News -

UK exits recession as interest rates stay on hold

Written by:
The Bank of England has kept interest rates on hold for the 44th consecutive month and refrained from launching a fresh round of quantitative easing (QE) after recent data showed the UK exited recession in the third quarter.

The Bank’s most recent round of QE, announced in July, came to a close this quarter, with total asset purchases having reached £375bn.

Economists had expected further purchases to commence this month but the stronger-than-expected GDP figures released in October saw most of those forecasts scrapped.

The Office for National Statistics announced at the end of last month that UK GDP for the third quarter of 2012 came in at 1% on its initial estimate, putting an end to three consecutive quarters of contraction.

Economists still expect further quantitative easing in the months ahead, however.

“The MPC’s decision to leave policy on hold today would not have been an easy one and the vote could have been quite close,” said Capital Economics’ chief UK economist Vicky Redwood.

“We think that more policy stimulus will be required in the coming months – the question is whether the Committee feels it has the tools to deliver it.”

Sterling set a one-month high against the euro prior to the announcement, the single currency falling to a low of 79.73p, and was largely unmoved on the news.

The next sign of the Bank’s current thinking will come next week, when the BoE’s quarterly inflation report is published on 14 November.

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
BLOG: What’s the Olympic legacy for housing?

Graham Felstead, head of intermediary channel at NatWest Intermediary Solutions, looks at how the Olympics impacted the housing market in...