MPC keeps QE on hold

POSITIVE signs from the UK economy were enough to lead the Monetary Policy Committee to postpone further cash injections today.

The MPC voted to maintain the Bank of England’s quantitative easing programme at £375bn and hold the base rate at 0.5%.

Since its October meeting, official figures have shown the UK economy grew by 1% in the third quarter while jobs data has also shown improvement.

However, questions remain over the strength of the recovery and most analysts believe further quantitative easing has been postponed rather than abandoned altogether.

Coverage of the MPC is brought to readers of TheBusinessDesk.com in partnership with stockbrokers Redmayne-Bentley.

Phillip Wong, from Redmayne-Bentley, said: “The decision to keep the base interest rate at 0.5% was unsurprising. However, the decision not to extend QE measures may raise a few eye brows.

“Although the UK came out of recession recently, following 1% growth between July and September, the true test will come in the last quarter of 2012 when data will not be influenced by the ‘Olympics effect’.

“Perhaps the decision for no QE is an indication that the Bank of England want to see the full effects of the Funding for Lending Scheme (FLS) before taking further action.”