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Bank Maintains Base at 0.5%

The Bank of England today announced it is to maintain its position on Base Rate and the Asset Purchase Programme.

Unsurprisingly, Base Rate was left at 0.5% and the Asset Purchase Programme was kept at £275bn, only a month after the second round of Quantitative Easing, worth £75bn, was announced.

Interest rates are not expected to change for some time as concerns over the UK economy persist despite concerns over inflation.  Even from its current levels, the Bank of England believes that inflation will fall back sharply in 2012.  However a note of caution from the Bank includes that if expectations of high inflation pass through in wage setting then the pace of the fall in inflation may be slowed.

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