- POSTED: 10 Oct 2013 22:59
This graph is an experimental feature that tracks number of views over time.
The Bank of England kept its key interest rate at a record-low level of 0.50 percent on Thursday, as expected.
LONDON - The Bank of England kept its key interest rate at a record-low level of 0.50 percent on Thursday, as expected.
BoE policymakers decided also to maintain the amount of cash stimulus that the central bank is pumping around the British economy at £375 billion ($598 billion, 442 billion euros), a statement said.
The crisis policies of some leading central banks involving the supply of low-interest money to stimulate their economies, and the question of when these taps will be turned off, is a hot issue on global financial markets.
This was shown by the focus on the appointment on Wednesday of Janet Yellen to head the US Federal Reserve.
Yellen is considered a so-called "dove" and therefore likely to delay the expected tightening of US monetary policy.
"The Bank of England's Monetary Policy Committee (MPC) at its meeting on 9 October voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5 percent," it said.
"The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion."
The outcome had been widely expected by markets. The BoE will publish minutes of the meeting, that will provide reasons behind the decisions, on October 23.
The latest BoE decisions, announced a day after they were taken, come amid an unexpected drop in British industrial output.
Wednesday's poor figures were in contrast to recent strong economic data, underscoring the fragility of Britain's recovery, analysts said.
October's MPC gathering was the second session since it announced a "forward guidance" strategy under new governor, Canadian national Mark Carney.
Under the policy change, any rise in record-low interest rates is to be tied to a drop in British unemployment.
The key interest rate will remain at the current level of 0.50 percent until Britain's unemployment rate falls to at least 7.0 percent, the central bank has said.
The Bank of England's own projections indicate that such a drop from Britain's current unemployment rate of 7.7 percent would not occur for three years, but markets are betting on this happening sooner.
The interest rates could in any case rise earlier should British annual inflation remain high above its target rate of 2.0 percent, the Bank of England has itself warned.
The BoE's main task is to use monetary policy as a tool to keep annual inflation close to a government-set level of 2.0 percent, in order to preserve the value of money.
British annual inflation fell to 2.7 percent in August from 2.8 percent in July, recent official data showed.
The BoE kickstarted its stimulus, or quantitative easing (QE) programme, in March 2009, coinciding with its decision to cut its main lending rate to 0.50 percent, where it has stood ever since.
Under QE, the central bank creates cash that is used to buy assets such as government and corporate bonds with the aim of boosting lending -- and economic activity.