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Summary The Bank of England decided to keep its key interest rate at a record-low level of 0.50.
The Bank of England decided on Thursday against pumping the British economy up with more new cash and voted to hold its key interest rate at a record-low level of 0.50 percent after the country emerged from recession.The Bank of Englands Monetary Policy Committee voted to maintain the official bank rate paid on commercial bank reserves at 0.5 percent, it said in a statement.The BoE addedd that its quantitative easing (QE) cash stimulus programme would remain at 375 billion ($604 billion, 467 billion euros).Minutes of the latest regular monthly meeting, to be published on November 21, will provide the reasoning behind Thursdays decisions.Also on Thursday, the European Central Bank voted to keep eurozone borrowing costs at a record low 0.75 percent, as it continues to assess the impact of its latest measures to fight the eurozone debt crisis.The Bank of England had been expected to maintain its monetary policy stance after recent data showed the British economy bounced back from a double-dip recession in the third quarter of 2012, helped by the London Olympics.The BoE had cut its key lending rate to the current record low level in March 2009, when it also launched its radical QE policy to pump up the British economy with hundreds of billions of pounds.The bank raised QE by 50 billion to 375 billion in July in a fresh attempt to stimulate lending by retail banks and help prevent economic contagion from the debt crisis in the neighbouring eurozone.Last month, analysts had expected the Bank of England to announce an increase to its QE stimulus at the two-day November meeting but changed tack after data showed Britain had escaped its longest double-dip recession since the 1950s.Gross domestic product (GDP) rallied by 1.0 percent in the third quarter, or three months to September, after output had contracted for the previous three quarters, recent data showed.But growth turned positive on one-off factors, including the London 2012 Olympic Games and rebounding activity after an extra public holiday for Queen Elizabeth IIs Diamond Jubilee in the second quarter.Despite Britains emergence from recession, a weak run of economic data has sparked concern over the fragile nature of the recovery -- and speculation over more QE stimulus.Economists expressed fears over the underlying health of the economy after weak purchasing managers surveys for Britains construction, manufacturing and services sectors in October.Figures also British industrial output tumbled by 1.7 percent in September from the August level -- far worse than market expectations for a small drop of 0.4 percent.Under QE, the Bank of England creates cash that is used to purchase assets such as government and corporate bonds with the aim of boosting economic activity.The BoEs main task is to use monetary policy as a tool to keep annual inflation close to a target of 2.0 percent.British 12-month inflation slowed close to a three-year low at 2.2 percent in September, but many analysts warn that recent domestic energy price hikes would reverse the decline.
