Thursday, 10 January 2013 12:32
Bank of England continues to hold interest rates into 2013
The Bank of England has held interest rates at 0.5 per cent and the asset purchase programme at £375bn.
The decision was made at the meeting of the Monetary Policy Committee on 9-10 January.
Interest rates have remained unchanged since March 2009 while the most recent addition to the asset purchase programme was £50bn last July.
At last month's meeting the committee said growth remained "subdued" and was weaker than expected. It forecast inflation would continue to remain above its two per cent target in the medium term. It was also waiting to see how well the Funding for Lending service performed before making any major policy changes.
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Only one member of the committee, David Miles, voted for an increase in the asset purchase programme last month, he favoured an increase of £25bn to bring the total to £400bn.
Barry Naisbitt, chief economist at Santander UK, said the decision was no surprise.
"There remains uncertainty about the underlying pace of economic activity with the strong estimate of GDP growth in the third quarter of last year being flattered by special factors and the latest monthly indicators of economic activity showing a weakening in the final months of last year.
"In the weeks ahead the MPC will be continuing to monitor the economic signs on both activity and inflation to decide whether it considers it neccessary to provide any further policy boost."
Anna Leach, head of economic analysis at the Confederation of British Industry, said: "A change in monetary policy was unlikely this month given the UK economy continues to send out mixed signals. Underlying economic conditions remain fairly flat and there are early signs that credit availability is being boosted by the Funding for Lending Scheme.
"We're not expecting any change in monetary policy over the next few months unless compelling evidence of a renewed downturn emerges."
Further details of the bank's decision this month will be given in the minutes which will be published on 23 January.
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The decision was made at the meeting of the Monetary Policy Committee on 9-10 January.
Interest rates have remained unchanged since March 2009 while the most recent addition to the asset purchase programme was £50bn last July.
At last month's meeting the committee said growth remained "subdued" and was weaker than expected. It forecast inflation would continue to remain above its two per cent target in the medium term. It was also waiting to see how well the Funding for Lending service performed before making any major policy changes.
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Only one member of the committee, David Miles, voted for an increase in the asset purchase programme last month, he favoured an increase of £25bn to bring the total to £400bn.
Barry Naisbitt, chief economist at Santander UK, said the decision was no surprise.
"There remains uncertainty about the underlying pace of economic activity with the strong estimate of GDP growth in the third quarter of last year being flattered by special factors and the latest monthly indicators of economic activity showing a weakening in the final months of last year.
"In the weeks ahead the MPC will be continuing to monitor the economic signs on both activity and inflation to decide whether it considers it neccessary to provide any further policy boost."
Anna Leach, head of economic analysis at the Confederation of British Industry, said: "A change in monetary policy was unlikely this month given the UK economy continues to send out mixed signals. Underlying economic conditions remain fairly flat and there are early signs that credit availability is being boosted by the Funding for Lending Scheme.
"We're not expecting any change in monetary policy over the next few months unless compelling evidence of a renewed downturn emerges."
Further details of the bank's decision this month will be given in the minutes which will be published on 23 January.
• Want to receive a free weekly summary of the best news stories from our website? Just go to home page and submit your name and email address. If you are already logged in you will need to log out to see the e-newsletter sign up. You can then log in again.
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