March 8, 2013
BOE holds rate steady, maintains asset purchase target
The Bank of England (BOE) held its official Bank Rate paid on commercial bank reserves steady at 0.5 percent, as widely expected, and maintained its target for asset purchases at 375 billion pounds.
The BOE, which has not changed its benchmark interest rate since March 2009, did not make any further comments in its brief statement apart from saying that minutes of today’s meeting would be published on March 20.
The U.K. central bank had been expected by some economists to increase the size of its asset purchase program after three of it’s nine-member Monetary Policy Committee last month voted to raise the bond-buying program by 25 billion pounds.
Britain’s headline inflation rate was steady in January at 2.7 percent for the fourth month in a row, above the BOE’s 2.0 percent inflation target.
The country’s Gross Domestic Product contracted by 0.3 percent in the fourth quarter from the third quarter, for annual growth of 0.3 percent.
Last month the BOE said it expects the UK economy to slowly recover though risks are weighted to the downside due to the challenges facing the euro area.