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BoE holds base rate at 0.5%

The Bank of England’s Monetary Policy Committee today voted to keep base rate at 0.5 per cent for the 15th consecutive month.

It also agreed to maintain the size of the asset purchase programme at £200bn.

The last change in base rate was a reduction of 0.5 per cent to 0.5 per cent on March 5 2009.

A programme of asset purchases, financed by issuing central bank reserves, was also initiated on March 5 2009. The most recent change in the size of the programme was an increase of £25bn to a total of £200bn on November 5 2009.

Legal & General director of mortgages Ben Thompson says: “There are plenty of differing opinions from economists at the moment about whether inflation or deflation is a greater threat to the economy, but one thing that we can all agree on is that we are not out of the woods yet.

“With an emergency Budget imminent, there was no way that the committee was going to increase the Base Rate today. However there is significant disparity in views about when this situation may change. It can be best summed up in just one word – insecurity.”

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