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Base rate held at 0.5% again

The Monetary Policy Committee has voted to keep base rate at 0.5 per cent for the 69th consecutive month.

Committee members also voted to maintain the programme of quantitative easing at £375bn. The QE programme has remained unchanged since July 2012, when it was increased from £325bn.

Minutes from last month’s meeting revealed that MPC members Ian McCafferty and Martin Weale voted for the fourth month in a row to increase the benchmark interest rate to 0.75 per cent, while the remaining seven members voted to maintain both base rate and the programme of quantitative easing.

The minutes from this month’s meeting will be published on 17 December.

Capital Economics senior UK economist Samuel Tombs says: “Low inflation is likely to have meant that the MPC’s decision to keep base rate at 0.5 per cent this month was straightforward.

”And while signs that the recovery is maintaining its pace and pay growth is rising suggest that a majority to raise rates could be mustered by mid-2015, yesterday’s Autumn Statement, which left an intensifying fiscal squeeze in place, suggests that rates are only likely to rise very slowly.”

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