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Interest rates held again at 0.5%
The Bank of England has left interest rates unchanged at the record low of 0.5% for the 19th consecutive month and also announced there will be no fresh injection of money through quantative easing (QE).
QE is the Bank's policy of pumping money into the economy in order to increase the supply of money and stimulate demand. Over £200bn has already been spent.
Despite one member of the MPC voting for a rate increase last month this decision was widely expected and there are fears that a rise in rates would damage the country's economic recovery.
"The MPC's decision to maintain its current stance was widely anticipated, and it is likely to keep things on hold a little longer. The interesting question is what will happen as we move into 2011," said Ian McCafferty, CBI chief economic adviser.
"There is a lively debate between MPC members. Some fear that the weakness of the domestic economy will drive inflation well below target, thus requiring further monetary stimulus. Others think the medium-term inflation outlook is less benign owing to imported raw material costs and loosening inflation expectations."
Post Date: October 7th, 2010
QE is the Bank's policy of pumping money into the economy in order to increase the supply of money and stimulate demand. Over £200bn has already been spent.
Despite one member of the MPC voting for a rate increase last month this decision was widely expected and there are fears that a rise in rates would damage the country's economic recovery.
"The MPC's decision to maintain its current stance was widely anticipated, and it is likely to keep things on hold a little longer. The interesting question is what will happen as we move into 2011," said Ian McCafferty, CBI chief economic adviser.
"There is a lively debate between MPC members. Some fear that the weakness of the domestic economy will drive inflation well below target, thus requiring further monetary stimulus. Others think the medium-term inflation outlook is less benign owing to imported raw material costs and loosening inflation expectations."
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Post Date: October 7th, 2010
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