Bank of England holds interest rates steady

After another nail-biting session, the Bank's Monetary Policy Committee is sticking to its guns on the record low 0.5% rate.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
Interest rates are going to stay at 0.5% for yet another month, the same rate we’ve had since March 2009, the MPC confirmed today. And the quantitative easing programme will also remain unchanged. At least, for now.

Back in October, the Bank announced that there was £75bn left in the pot to sustain liquidity in the UK economy. That cash will be printed, as and when it’s needed, until the Committee’s next meeting at the beginning of February.

This isn’t a shock decision. A general torpor has settled into economic policy: the eurozone interest rates also remain unchanged at 1%. General growth paralysis has prompted inertia in policy: the manufacturing industry is still stuck in a rut, the UK retail figures are up a meagre couple of percentage points, and the consumer confidence gauge is permanently set to ‘fed up’.

Economists argue that the UK economy is simply stagnating, rather than actually declining, which isn’t brilliant, but neither is it financial Armageddon. But the pressure will be on the Bank of England come February 7 to at least attempt to drum up a little growth. MT’s calls to mind that old adage about busy fools…

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