Bank holds rates at 0.5 per cent

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The Bank of England's Monetary Policy Committee voted to keep interest rates at 0.5 per cent and the quantitative easing programme on hold at the conclusion of its regular meeting yesterday. The decision was entirely expected.

Analysts said the Bank would wait until the emergency Budget later this month before deciding on any alteration in policy. The working assumption in the City is that the tougher the Budget delivered by the Chancellor George Osborne is on cutting the deficit, the longer the Bank will maintain its easy monetary policy.

The last change in the Bank rate was the cut to 0.5 per cent in March 2009, the lowest in the Bank's 315-year history. The quantitative easing programme of gilts purchases, to inject £200bn into the economy, was also initiated at that time.