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Bank of England holds interest rates at 0.5%

Bank of England BoE Bank 480

The Bank of England’s monetary policy committee has held base rate at 0.5 per cent.

The committee has also voted not to extend quantitative easing beyond the existing £375bn provision. The programme has not been changed since July when it was raised by £50bn.

Base rate has remained at the record low level of 0.5 per cent since March 2009.

Ryner and Partners’ Neil Ryner says: “An interest rate cut was never on the table, despite the very real danger that the economy may contract in the final quarter of the year.

“With GDP still officially growing, the Bank is clearly keeping its QE powder dry until the new year. But with economic forecasters clamouring to outdo each other in the bleakness of their predictions for next year, further monetary stimulus is all but certain. Yet it may be that the Bank’s weapon of choice changes. Rather than the QE money presses, the funding for lending scheme could take centre stage as its preferred way of drip-feeding money into the system.”

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