Base rate held at 0.5% and no more QE

The Bank of England’s Monetary Policy Committee has held base rate at a record-low of 0.5 per cent for the 34th consecutive month and has voted to keep its quantitative easing programme at £275bn.

The MPC reduced base rate to 0.5 per cent from 1 per cent on March 5, 2009, and on the same day initiated a £75bn QE programme.

In October, the BoE added £75bn to its QE programme, bringing the total value of asset purchases to £275bn. The additional purchases are scheduled to run until February.

Legal & General Mortgage Club managing director Ben Thompson says: “The Christmas period and start to the New Year kicked off with all manner of negative predictions and forecasts however there have been some glimmers of hope as well. These glimmers are just that, and there is a very long way to go before any fiscal tightening is required.

“However these pieces of good news, amongst other key factors will have allowed the Bank another month to fully consider all indicators in more detail before unleashing a further round of QE, which is widely expected to happen either in February or later in the year. For now it is a pause and that at least means there is no major or obvious panic, all eyes for now remain firmly fixed on the eurozone.”