AP News

Bank of England: no change in base rate, stimulus


LONDON (AP) — The Bank of England left its base interest rate unchanged Thursday and did not authorize any additional stimulus measures, a decision which was widely expected by the market.

The announcement by the Monetary Policy Committee left the Bank's key rate at the all-time low of 0.5 percent, where it has been since March 2009.

The Bank's program of so-called quantitative easing — purchases of government bonds and other high-quality debt meant to boost lending — remains at a total of 375 billion pounds ($604 billion).

The Bank last expanded the quantitative easing program in July, when it raised the total by 50 billion pounds. Expectations of further stimulus measures evaporated after the U.K.'s gross domestic product rose by an unexpectedly strong 1 percent in the third quarter, ending a nine-month recession.

Some analysts now expect no further stimulus next year.

"Our own view is that the economy will show some signs of life again over the next couple of months and that inflation will climb above 3 percent early next year, and so we do not expect the (committee) to extend QE in 2013," said Philip Shaw, chief economist at Investec Securities.


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