Bank announces latest interest rate decision
THE Monetary Policy Committee chose to sit on its hands today ahead of data showing how the UK economy performed in the third quarter.
The Bank of England base rate was held at 0.5% while the value of its quantitative easing programme was maintained at £375bn.
Later this month, the first estimate of GDP growth in the third quarter will be published revealing whether the UK economy is still officially in recession and it is likely MPC members wanted to see those figures before taking further action.
However, most analysts do expect the MPC to inject further cash into the economy before the end of the year.
Dr Brian Sloan, chief economist at Greater Manchester Chamber of Commerce, which has 5,000 members said: “This decision was widely expected as the Bank has not yet completed the purchases it announced at July’s meeting.
“There is still £12.25bn to spend, though this will remain focused on gilt purchases that have very limited impact on the wider economy.
“With current economic conditions flat-lining and signs of weakness in the labour market, the Bank will announce further asset purchases at next month’s meeting, but it must use the money it has created more wisely to promote growth in the real economy.
“Increasing numbers of our members are reporting that they are seeing no obvious impact from these measures so far. Failure to act with more urgency by the Bank has left us exposed to the weakness of demand in export markets as we expected last year, but the Government must also take some responsibility.”
