No change on interest rates

THE Bank of England took a ‘no change’ stance today ahead of a major announcement from the European Central Bank.

The Monetary Policy Committee agreed to hold the base rate at 0.5% and maintain the value of its quantitative easing programme at £375bn.

Its decision came ahead of ECB president Mario Draghi’s expected announcement on plans to ease the eurozone crisis through a bond-buying scheme.

The Bank of England has repeatedly warned that the future of the UK economy is tied closely to the fortunes of the eurozone.

“The economy is facing a domestic demand problem that the Bank has failed to grapple with.

“Although today’s decision is the right one, given that there is no need to inject more money into the economy to prevent inflation falling below the 2% mark, it remains a deep disappointment that the committee has not promoted growth in regions such as the North West, where there is huge potential for growth through infrastructure investment.

“This would also have the longer term benefit of making the national economy more competitive and, at a time of relatively low commodity prices, now would be the ideal time to make those investments.”