Bank of England opts for no change on interest rates
BANK of England policymakers have opted to maintain interest rates at their historic low and have made no move to further increase quantitative easing (QE).
Mixed signals over the immediate direction of the economy made any move unlikely and the Monetary Policy Committee erred on the side of caution.
The 0.5% rate has now been effective for more than three years and while the MPC may look at QE next month, for now it has decided to keep it at £325bn following its decision in February to pump an extra £50bn into the system.
Andrew Connors, area director for Lloyds Bank Wholesale Banking & Markets in the West Midlands, said: “This month there is good news as falling inflation boosts consumer spending but there are some clouds gathering around money supply and the pace of economic activity which is why, on balance, Lloyds expected rates to be held again with more QE a likely possibility in May.”
The move will appease business leaders in the West Midlands, who had appealed to the Bank ahead of today’s announcement to maintain rates at current levels.
Sara Fowler, Senior Partner for Ernst & Young in the Midlands, said: “Although economic growth in the region continues to be slow there was some more positive news this week with the announcement that manufacturing grew at its fastest pace for 10 months during March.
“Continued low interest rates are a further boost to Midlands businesses who must continue to build export strategies to find growth during these challenging times.
“In last month’s Budget, the Chancellor laid down a challenge to UK businesses to double exports in the next decade and increase the UK’s level of business with the BRIC economies. Our Growing Beyond team in the Midlands is continuing to advise local firms on the benefits of exporting to these emerging markets while economic conditions at home are slow.”
