BoE Leaves Monetary Policy Unchanged

The Bank of England’s Monetary Policy Committee decided on March 6th 2014 to maintain the bank rate on hold at 0.5 percent, as widely expected. The stock of asset purchases was also left unchanged at 375 billion pounds.

The Committee agreed to reinvest the £8.1 billion of cash flows associated with the redemption of the March 2014 gilt held in the Asset Purchase Facility.

Last year, the Bank said it would only consider interest rate hikes when unemployment fell to 7 percent. But after it fell faster than expected, the Governor Mark Carney extended the guidance policy to include other economic indicators like wage growth and productivity. Yet, in the three months to December of 2013, the jobless rate surprisingly rose to 7.2 percent, after falling to 7.1 percent from September to November.

In January, the annual inflation rate fell for the first time in more than four years below the bank’s 2 percent target level to 1.9 percent.

On February 12th, the Governor said the Bank would no longer tie its future policy decisions to any particular economic indicator and hinted that interest rates may need to start rising only in the second quarter of 2015.

BoE Leaves Monetary Policy Unchanged

BoE | Joana Taborda |
3/6/2014 12:24:42 PM