Bank reveals latest interest rates decision

DISAPPOINTING second quarter growth was not enough to force the Monetary Policy Committee’s into further action today.

The MPC held interest rates at 0.5% and decided not to expand its quantitative easing programme beyond its current £375bn limit.

Recent data suggesting GDP shrank 0.7% in the second quarter had triggered speculation that the MPC may take further action.

Reacting to the Bank’s ‘wait and see approach’ Dr Brian Sloan, chief cconomist at Greater Manchester Chamber of Commerce, said: ““It is difficult to see how the Bank can respond with urgency as the economy has already contracted and it would be responding to something that it cannot change.

“It is frustrating that the Bank has not acted more forcibly to address the issue of weak demand in the economy, especially through infrastructure investment, and it will take a more innovative response to break out of the low growth environment we find ourselves in.

“One way the Bank could help promote growth would be through establishing a market for small and medium sized business to issue bonds and ease credit constraints on these firms.”