BOEThe Bank of England’s monetary policy committee has once again voted to maintain the base rate at 0.5 per cent – the 62nd consecutive month of record-low rates.

MPC members also voted to keep the Bank’s programme of quantitative easing at £375bn.

The last change to base rate was a 0.5 per cent reduction to its current level on 5 March 2009. On the same day the Bank launched its QE programme.

Since August, the Bank of England has sought to give consumers an indication of when base rate is going to rise through a policy of forward guidance.

It originally stated that base rate would not increase until unemployment dipped below 7 per cent or there was an unexpected spike in inflation.

However, in February Bank of England governor Mark Carney changed how the bank uses forward guidance, just six months after first introducing the policy to the UK, although he maintains the policy has worked so far.

The overhaul of forward guidance sees the direct link with employment dropped so the BoE can focus on a much wider range of indicators focusing on absorbing all of the spare capacity in the economy. This will see the Bank publish forecasts of 18 more economic indicators for the first time.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.