The Bank of England left its record low key interest rate and the size of the quantitative easing unchanged, amid mixed signals about the economic momentum.
The Monetary Policy Committee, led by Governor Mark Carney, decided to retain the key bank rate at 0.50 percent and the size of asset purchases at GBP 375 billion at the end of the two-day rate setting meeting on Thursday.
The rate has been at a historic low since March 2009. The previous change in quantitative easing was an increase of GBP 50 billion in July 2012.
Over the recent months, the MPC stood unanimous on interest rates. The minutes of the June meeting is due on 17.
It is possible that the minutes will show the two relative hawks Martin Weale and Ian McCafferty are getting closer to voting for a rate rise given the ongoing strengthening of the labour market and rising wages, ING Bank NV economist James Knightley noted.
IHS Global Insight economist Howard Archer said current robust consumer activity and signs that housing market activity is picking up suggest that an interest rate hike early on in 2016 is becoming increasingly likely.
In the quarterly Inflation Report, released in May, the bank suggested that the interest rate would be raised by the middle of 2016 and inflation is projected to return to target within two years.
In the open letter to the Chancellor last month, Carney said that inflation is likely to see a negative outturn at some point. Therefore, it is very likely that further open letters will be written in coming months, he said.
In April, inflation entered the negative zone for the first time since 1960, due to falling food and transport costs. Consumer prices fell 0.1 percent after staying flat in March.
Official reports and survey data released over the last few weeks provided a mixed picture about the strength of the recovery. The dominant services sector grew at the slowest pace in five months in May, the Purchasing Mangers' survey showed this week.
In the first quarter, economic growth eased to 0.3 percent, the slowest expansion since the fourth quarter of 2012.
On the other hand, retail sales rebounded on clothing demand in April. Sales advanced at the fastest since November.
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.