BOE Leaves Bank Rate Unchanged At 0.5% At Feb Meeting
Published Friday, 11th February 2011 01:02 am - © 2011 MNI News
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LONDON (MNI) - The Bank of England Monetary Policy Committee left Bank Rate on hold at its February meeting at 0.5%, in line with analysts' expectatations. The MPC made no statement to justify the decision and the thinking behind it will only become clearer when the February Inflation report is published on Wednesday, Feb 16.
A Market News survey found all analysts had predicted no change, although some saw it as a close call. The probability they attached to a rate hike ranged from just 5% to 40%, with the median probability 20%.
Bank Rate has been at 0.5%, its record low level, since March 2009. This is the longest period the BOE has left interest rates unchanged since the 1940 to 1950 decade.
At the January meeting, two of nine member MPC, Andrew Sentance and Martin Weale, voted for a 25 basis point hike, with the minutes revealing that for some other members the decision was "finely balanced."
The BOE MPC also said Thursday it had made no change to its asset purchase programme - its vehicle for quantitative easing. MPC members have said the active policy instrument will be Bank Rate with the implication the committee will hike Bank Rate before starting to unwind the asset purchases.
Analysts' median forecast is for no rate hike until Q4, although a substantial minority expect a hike in May, when the MPC will have the next but one Inflation Report forecasts to guide it and when it should be clearer if the economic recovery is continuing.
The minutes of the MPC's February meeting will be published on Feb 23.
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