The bank's Monetary Policy Committee met on 8 May, the day after the election, and voted to maintain the Bank Rate at 0.5%. The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion. The bank rate announcement was made today.
The Committee's latest inflation and output projections will appear in the Inflation Report to be published at 10.30 am on Wednesday 13 May. At the same time, an open letter from the Governor to the Chancellor of the Exchequer will be published, following the release of data for CPI inflation of 0.0% in March. Some experts have forecast that 0 per cent inflation or mild deflation will be become the norm for a few months. The minutes of the meeting will be published at 9.30 a.m. on Wednesday 20 May.
The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of £50 billion to a total of £375 billion on 5 July 2012.
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The base rate has been unchanged for an unprecedented period. Some commentators have said that with low inflation and little sign of the economy overheating, an increse to the base rate is unlikely before 2016 at the earliest.
Financial Planner Chris Williams, chief executive of Wealth Horizon, said: "On the face of it this announcement, which was widely expected, is business as usual, with market participants having already predicted neither rates nor the QE programme would be changed in May.
"However, given the quarterly inflation report is out later this week, it suggests there is also no major shift in the longer-term inflation outlook as yet, or else the MPC may have been forced to act."