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Bank of England pursues asset purchase plans

The Bank of England’s Monetary Policy Committee (MPC) today voted to hold its base interest rate at 0.5% and vowed to press ahead with £125 billion asset purchase plans.

The MPC reduced rates from 1% to 0.5% in March to combat the continuing economic downturn caused by the fall-out from the global financial crisis.

Recent positive signs, including three consecutive months of rises in mortgage approvals and improving sentiment from the business community over the prospects for the economy, have suggested Britain is past the worst of the downturn.

The inclusion of a reference to the asset purchase programme shows a continued commitment to the policy of quantitative easing, and the Bank projects the programme will take a further two months to complete.

The release also states that the scale of the facility will be kept under review suggesting that it could be increased to the authorised maximum of £150 billion were an improvement in the private sector not to materialise as expected.

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