Thursday, April 9, 2015

U.K. central bank maintains rate, stock of assets

    The Bank of England (BOE) maintained its benchmark Bank Rate at 0.5 percent and its stock of assets purchased at 375 billion pounds, as widely expected.
    The central bank of the United Kingdom, which has kept its rate at technically zero since March 2009 to stimulate economic growth, is first expected to raise rates at some point next year as inflation remains far below the bank's 2.0 percent target and there are few signs of upward pressure.
    U.K. consumer price inflation fell to zero percent in February from 0.5 percent in January and is expected to decline further in response to the fall in oil prices and commodities.
    But BOE officials have also stressed that they will look past the temporary fall in inflation when deciding on their policy stance and last month BOE Governor Mark Carney said the next move in interest rates is like to be up rather than down.
    The BOE's monetary policy committee has been unanimous since January this year in voting to keep rates steady. However, from August through December last year two MPC members, Martin Weale and Ian McCafferty, voted to raise the rate by 25 basis points, arguing rates should rise ahead of wage rises.
    The minutes of today's MPC meeting will be published on Wednesday, April 22, the BOE said.
    U.K. Gross Domestic Product expanded by 0.6 percent in the fourth quarter from the third quarter for annual growth of 3.0 percent, up from 2.8 percent in the third quarter and the strongest quarterly growth rate since 2006.


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