BoE united in keeping rates at record low

September 23, 2009

, LONDON, Sept 23 – Bank of England policymakers voted 9-0 to keep interest rates in recession-struck Britain at a record low 0.5 percent earlier this month, minutes of their latest meeting showed on Wednesday.

The BoE\’s nine-member monetary policy committee also voted unanimously to maintain its programme to pump out 175 billion pounds (194 billion euros, 287 billion dollars) of new money under so-called quantitative easing (QE).

Under QE, the BoE effectively creates money by buying bonds from commercial institutions in the hope of boosting lending to businesses and individuals, such as those seeking mortgages.

After last month\’s shock decision to pump an extra 50 billion pounds of new cash into the economy, the BoE opted to sit tight in September.

However, the minutes indicated on Wednesday that an expansion of the scheme might be desirable at some stage in the future.

"For those members who had preferred a larger stimulus at the August meeting, a larger asset-purchase program could still be justified," the minutes read.

"But in the absence of significant news about the medium term, the case for adjusting the program now was outweighed by the benefits of following through with the program of asset purchases announced in August."

The central bank has sought to combat recession with record-low interest rates and the radical QE policy.

In March, the BoE launched QE and slashed its key lending rate from 1.0 percent to the lowest level since the establishment of the bank in 1694.

The bank\’s main job is to keep annual British inflation close to a 2.0 percent target.

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