MPC takes ‘wait and see’ view
DISAPPOINTING second quarter growth was not enough to force the Monetary Policy Committee 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.
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Lauren Charnley, from Redmayne-Bentley, said: “There were no surprises with the Monetary Policy Committee’s decision to keep interest rates at their historic low of 0.5% today.
“Regardless of the continuing contraction of the UK economy, rates are to remain where they are and there will be no further QE stimulus for the mean time. It looks as though the MPC are holding off from any major decisions ahead of the ECB meeting today and whether it will choose to further aid troubled Spain.”
Anna Leach, the CBI’s head of economic analysis, said: “The Funding for Lending Scheme is now up and running, which, alongside the current round of asset purchases, should provide some support to businesses.
“However, the outlook for the UK economy remains fragile, particularly in light of the disappointing official data for the first half of the year and the recent slowdown in global momentum.”
