MercoPress. South Atlantic News Agency

Bank of England leaves QE program and interest rates unchanged

UK economy slowly climbing out of recession

The Bank of England opted Thursday against providing fresh aid for the economy after a year of record low interest rates and emergency stimulus measures. Its rate-setting committee marked the first anniversary of quantitative easing by leaving the program unchanged at £200bn and holding borrowing costs at 0.5%.

The Monetary Policy Committee “voted to maintain the official bank rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. The minutes of the meeting will be published at 9.30am on Wednesday 17 March”, said the short release from the Bank of England.

The no-change policy was widely predicted and comes a week after official estimates suggested Britain's climb out of recession was marginally stronger than previously thought in the final quarter of 2009.

But the 0.3% economic growth was still less than analysts' initial expectations, while markets are also showing jitters about the scale of the UK's budget deficit and uncertainty regarding the general election outcome.

Recent surveys have showed manufacturing and services activity picking up pace and consumer confidence at its highest level for two years.

But snow and a rise in VAT have hit retailers, while house prices also registered their first fall in nearly a year during February, according to surveys from Halifax and Nationwide.

However new car registrations were up by 26.4% in February, compared with the same month last year, the Society of Motor Manufacturers and Traders (SMMT) has said. The scrappage scheme fuelled the eighth consecutive month of growth in the new car market, accounting for 19.6% of sales.