Bank of England: No Policy Changes as Expected

April 8, 2010

At 11:00 GMT, a newly designed Bank of England website confirmed what everyone expected: no changes in the 0.5% Bank Rate or the Gbp 200 billion ceiling of the asset purchase facility (APF).  The Bank Rate was last reduced in March 2009, and quantitative easing via the APF reached its present limit after January.  In six steps from October 2008 to March 2009, the Bank Rate was slashed from 5.0% to 0.5%.  The APF began in March 2009 with a Gbp 75 billion limit, then was raised to Gbp 125 billion in May, Gbp 175 billion in August and Gbp in November of last year.  The last cyclical peak in the Bank rate was at 5.75% between July 2007 and December of that year.   Message from the Monetary Policy Committee gave no reasons for today’s decision or coverage of the committee’s discussion, deferring such as usual to the publication of the minutes on April 21st.  The most newsworthy information was a reminder that because of the general election on May 6, the next policy announcement will be put off a few days to Monday, May 10, and will be followed by the quarterly inflation report on May 12.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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