Bank sticks to its guns with 'no change' on rates and QE

The Bank of England's Monetary Policy Committee has kept the scale of its money-printing programme unchanged at £375bn and held interest rates at their record low of 0.5 per cent.

The decision comes a day after the Chancellor's fiscal watchdog admitted the economy was on course to shrink by 0.1 per cent over 2012 and was likely to be contracting again during the current quarter.

The MPC is reluctant to sanction more quantitative easing despite the bleak picture on growth, while it assesses the impact of its Funding for Lending scheme.

Figures today showed the UK's trade deficit widened from £2.5bn to £3.6bn during October.

Meanwhile, the European Central Bank, which also kept interest rates unchanged, at 0.75 per cent, lowered its expectations for the eurozone's economy, slashing its GDP estimate for 2013 to between minus 0.9 per cent and plus 0.3 per cent.