Bank of England leaves interest rate on hold
AFPLONDON--The Bank of England (BOE) on Thursday voted at a regular policy meeting to hold its reference interest rate at a record-low 0.50 percent, where it has stood for four years, and opted against increasing its cash stimulus program to boost a British economy on the brink of recession.
March 8, 2013, 12:34 am TWN
“The Bank of England's Monetary Policy Committee today voted to maintain the official bank rate paid on commercial bank reserves at 0.5 percent,” the BOE said in a statement following a two-day gathering.
“The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at 375 billion pounds” (US$589 billion).
Analysts had said the decision over stimulus, or quantitative easing (QE), had been on a knife-edge with Britain at risk of its third recession since 2009.
ECB Leaves Main Rate On Hold
Soon after the BOE announcement, the European Central Bank said it had decided to leave its main refinancing rate at a historic low of 0.75 percent, despite concerns that political gridlock in Italy could trigger a resurgence in the debt crisis.
ECB watchers had not expected the central bank to ease borrowing costs in the euro area this month, but analysts said they would listen to hear whether central bank chief Mario Draghi had anything to say about the political situation in Italy and the possible repercussions for the euro area as a whole.
Britain is not a member of the eurozone but relies heavily on the bloc for its day-to-day trading of goods and services.