Bank of England keeps rates at 0.5 pct as expected

LONDON, July 8 (BestGrowthStock) – The Bank of England’s Monetary
Policy Committee kept its main interest rate at a record-low 0.5
percent on Thursday, a decision widely expected by analysts due
to the risk of a slowdown in Britain’s economic recovery.

The BoE has held interest rates at 0.5 percent since the
depths of the recession in March 2009, though last month one
policymaker unexpectedly voted for an increase to 0.75 percent
because of ongoing above-target inflation.

As usual, the central bank made no statement alongside its
rate decision. A voting breakdown will only be available with
the publication of the MPC minutes on July 21.

The BoE made no announcement of changes to the 200 billion
pounds ($304 billion) of assets, mostly British government
bonds, purchased with newly-created money under its quantitative
easing scheme between March 2009 and February 2010.

Not one of the 61 economists polled by Reuters expected a
rate move, with most not seeing any monetary tightening until
mid-2011 at the earliest as policymakers seek to offset the
impact of massive government spending cuts.

BoE Governor Mervyn King said last month that the central
bank would raise interest rates before it sold these assets.

British inflation remains well above the central bank’s 2.0
percent target at 3.4 percent, but some of the factors that
pushed it to a 17-month high in April — such as rising oil
prices and weaker sterling — have now gone into reverse.
(Reporting by David Milliken, editing by Mike Peacock)

Bank of England keeps rates at 0.5 pct as expected