The Bank of England’s monetary policy committee has voted to keep base rate at a record-low 0.5 per cent for the 38th consecutive month and to keep its programme of quantitative easing at £325bn.
Base rate was cut to 0.5 per cent in March 2009, on the same day the BoE initiated a programme of QE worth £75bn.
In February, the BoE voted to increase the size of its QE programme by £50bn to £325bn. This latest round of QE completed earlier this month.
The minutes from last month’s MPC meeting show David Miles was the only committee member to vote for QE to be increased.
Capital Economics chief UK economist Vicky Redwood says: “Today’s decision by the Monetary Policy Committee to pause its programme of asset purchases shows that the Committee is putting greater weight on the recent stickiness of inflation than the poor activity news.
“But if we are right in expecting inflation to fall much further and the recent soft patch in the economy to continue, a resumption of quantitative easing is likely later this year.”
Legal & General Mortgage Club managing director Ben Thompson says: “With a largely disappointing month behind us for the UK economy and with the Euro debacle continuing, there is little doubt that there will have been much debate around whether or not to kick off another round of quantitative easing.
“However, with inflation remaining stubbornly higher than expected it is unlikely the Bank will extend this until it is explicitly clear that it has to – this may even be as early as next month and we shall see.”