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Will it be further three years for 0.5% bank rate?

The Bank of England’s monetary policy committee has kept bank rate at 0.5 per cent for the 36th consecutive month and has held its programme of quantitative easing at £325bn.

Last month, the MPC voted to increase QE by £50bn from £275bn. The MPC says it expects the latest round of QE to take two more months to complete and that a further round of asset purchases “will be kept under review”.

The minutes for last month’s meeting reveal that all nine MPC members voted to keep the base rate at 0.5 per cent. The minutes for March’s meeting will be published later this month.

Capital Economics chief UK economist Vicky Redwood says: “We think that base rate could stay at 0.5 per cent for another three years and while the consensus now thinks that the MPC is unlikely to extend its asset purchases any further, we still expect even more QE later this year.”

Legal & General Mortgage Club managing director Ben Thompson says he does not expect any changes to base rate or QE in the next few months.

He says: “Market wobbles still exist in terms of the eurozone and although we have seen some positive news in the economy since Christmas, it is way too early to claim sight of anything resembling green shoots just yet.

“The Bank of England will carry on with stimulative policy for many more months until we are demonstrably clear that the UK is out of the woods.”

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