The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The most recent change in the size of that programme was an increase of £25 billion to a total of £200 billion on 5 November 2009.
The Bank will continue to offer to purchase high-quality private sector assets on behalf of the Treasury and financed by the issue of Treasury bills, in line with the arrangements announced on 29 January 2009.
Policy makers, who reached their target for bond purchases in January and decided in February not to extend purchases, faced evidence this month that price pressures have increased because of higher energy costs and the pound’s weakness. Consumer prices rose an annual 3.7 percent in April, the most since 2008. Officials have said the inflation jump is temporary and won’t last because of the aftermath of the recession.