Bank keeps interest rates at 0.5%

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The Bank of England keeps interest rates on hold after cuts in recent months, and continues to pump cash into the economy.

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[Amethyst]

Re: Bank keeps interest rates at 0.5%

no suprises there

[Legal Beagles]

Bank holds rates at 0.5% as quantitative easing continues


It was likely to take another two months to reach its £75bn target of so-called quantitative easing, the Bank said

The Bank of England's monetary policy committee today left interest rates on hold for the first time since last September but said it was determined to continue with its policy of kickstarting the economy with £75bn of new money.
The monetary policy committee said after its latest monthly meeting that Bank Rate would remain at a record low of 0.5% after governor Mervyn King said last month that it was "very unlikely" that interest rates would be cut again.
It was likely to take another two months to reach its £75bn target of so-called quantitative easing, the Bank said today, as it has achieved £26bn of that total in its first month of buying government bonds, or gilts.
The pound was little moved by the announcement as it contained few surprises. It was trading around $1.46 and 90.5p to the euro just after the statement.

Mortgage easing



There were also indications that conditions in mortgage markets may be starting to ease today. Bank figures showed that the average two-year fixed rate at 75% loan-to-value last month was 4.01%, down sharply from February's 4.35% and the lowest since July 2003 when it was 3.87%.
The figures also showed that the average standard variable mortgage rate fell to 4.03% in March, down from 4.38% in February and the lowest level since the central bank started compiling the data 14 years ago.
Howard Archer, economist at IHS Global Insight said the reduction would probably help to help activity in the housing market to gradually recover.
"But it is still likely to be a very gradual pick up. Housing market activity is likely to remain relatively weak for some time to come leading to further price falls."

• Interest rates
• Interest rates
• Quantitative easing
• Economics
• Economic policy
• Mortgages

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