Friday, September 9, 2011

Bank of England Keeps Bank Rate at 0.50%

The Bank of England (BoE) kept its official Bank Rate, which is paid on commercial bank reserves, at a record low stimulatory level of 0.50%.  The BoE also made no changes to its 200 billion pound asset purchase program (also known as quantitative easing).  The Bank does not supply commentary with its monetary policy decisions, however the minutes of the monetary policy committee meeting will be published at 9.30am on Wednesday the 21st of September 2011, according to the Bank's announcement.  The Bank next meets on the 6th of October.

The Bank also held the official Bank Rate unchanged at 0.50% at its August meeting this year; the rate has remained on hold since March 2009, when the Bank reduced the interest rate by 50 basis points to 0.50%.  The United Kingdom reported annual consumer price inflation of 4.4% in July, compared to 4.2% in June, 4.50% in May and April, and 4.00% in March, and still above the Bank's inflation target of 2.00%.  The UK saw quarterly GDP growth of 0.2% in Q2 this year (0.5% in Q1), while annual economic growth was reported at 0.7% (1.6% previously).  The pound (GBP) last traded around 0.63 against the US dollar, having gained 3% so far this year.


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