MSE News: Base rate held at 0.5%

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"The Bank of England today announced it is holding the Base Rate at its 0.5% historic low for the 14th consecutive month ..."

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Base rate held at 0.5%

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inspector_monkfish

12:00 10May10 BANK OF ENGLAND MAINTAINS BANK RATE AT 0.5 PCT

inspector_monkfish

12:00 10May10 BANK OF ENGLAND ANNOUNCES NO INCREASE TO ITS 200 BLN STG QUANTITATIVE EASING TOTAL
12:00 10May10 BANK OF ENGLAND HOLDS KEY UK INTEREST RATE AT 0.5 PCT
12:00 10May10 BANK OF ENGLAND - MAKES NO STATEMENT
12:00 10May10 Bank of England holds rates, no change on QE

LONDON, May 10 - The Bank of England kept interest rates at 0.5 percent and made no change to its asset purchase target on Monday, keeping in place stimulus measures designed to nurse the economy back to health.

The decision was predicted by all 63 economists polled by Reuters, most of whom do not expect interest rates to rise until the fourth quarter of the year at the earliest.

Although price pressures have picked up more than expected in recent months, recovery remains tentative and the euro zone's debt crisis has shown how fragile sentiment can be.

Britain's inconclusive election outcome provided additional justification for the BoE's wait-and-see approach.

David Cameron's centre-right Conservatives and the smaller Liberal Democrats are attempting to reach a power-sharing deal after Thursday's election left Britain with its first hung parliament since 1974.

The Bank of England cut rates to their current record low and started quantitative easing in March 2009 when the economy was still reeling from a global credit crunch.

Things have got a lot better since and the BoE paused its asset purchase scheme in February once it had bought 200 billion pounds ($309 billion) of financial assets, mostly gilts.

But headwinds remain, not least from an impending public spending squeeze that some predict will be the toughest since World War Two, once a new government is in place.