By Daniel Hunter
The Bank of England's Monetary Policy Committee (MPC) have today (Thursday) decided to maintain interest rates at 0.5%, which means it has been at the same rate now for three years.
With the economy still experiencing certain difficulties, many expect the rate to be the same for at least another year.
As was expected, the MPC also opted against any further quantitive easing, which is currently at £325 billion, following last month's boost.
“This decision was expected as the current round of asset purchases is set to run until May," Ian McCafferty, CBI Chief Economic Adviser, said.
“Since the MPC has been signalling that the current policy stance is broadly appropriate, it appears that the economic climate would have to deteriorate to prompt a further extension of QE.
“Nevertheless, with economic conditions fragile and the level of uncertainty high, monetary policy decisions are still likely to be finely-balanced.”
Jeremy Cook, chief economist at foreign exchange company, World First, said the decision shows the Bank are simply sitting on their hands for now.
“The Bank has decided to sit on its hands, for now. No change was expected today, but the uncertainty surrounding what the MPC will do next is very real," he said.
“The market is still not expecting any rate movement until at least next year, but committee debate on whether to add further asset purchases will increase through Q1.
“The Bank has been happy to overlook the inflation target in recent years in order to stabilise the UK economy but, given movement in the oil markets, inflation will remain an issue for a long while yet.”
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