MPC takes same course on UK monetary policy

Monday 10 December 2012

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The Bank of England's Monetary Policy Committee (MPC) has decided to continue with its current course of action as it targets a sustainable economic recovery for the UK.

At the December meeting of the MPC, the nine-member panel voted to keep interest rates on hold at 0.5 per cent for a further month.

The MPC also rejected a further extension to the £375 billion quantitative easing programme, which is being used to stimulate demand in the economy.

Anna Leach, head of economic analysis at the Confederation of British Industry, said the MPC's decision came as little surprise.

She said a change in policy was "unlikely" given that the MPC had voted against further quantitative easing at its November meeting.

“But a further round of asset purchases certainly remains on the table, and the MPC’s outlook is already quite downbeat," Ms Leach stated.

"Recent data presents a mixed picture of momentum through the fourth quarter, with the CBI’s service sector and retail survey results relatively upbeat, but our manufacturing survey weaker."

She said that if evidence shows conditions have deteriorated further, this may prompt a shift in policy in the new year.

Posted by Steve Williams