MPC maintains ‘hold’ on QE
THE Monetary Policy Committee today decided the UK economy’s fall back into recession was not a reason to take immediate action.
The commmitee decided to maintain the Bank of England’s quantitative easing programme at £325bn.
Analysts had been split over how the MPC would respond today to the mix of data on the economy which has emerged since last month’s meeting.
The latest GDP figures had shown the UK experienced a second consecutive quarter of negative growth while CPI inflation defied expectations and rose slightly in March.
The MPC also confirmed the Bank of England’s base rate would remain at 0.5%.
Coverage of the MPC is brought to readers of TheBusinessDesk.com in association with stockbrokers Redmayne-Bentley.
Lauren Charnley, from Redmayne-Bentley, said: “The consumer prices index (CPI) rose to 3.5% in March against the Bank’s target rate of two percent. CPI has been running above this target for 28 consecutive months and the minutes from the April MPC meeting suggested that policy makers are becoming more concerned.
“It seems the focus is currently set on lowering inflation, rather than boosting the economy. For the time being quantitative easing will not be extended but many analysts believe this will be necessary to pull the country back out of recession.”
