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Bank Of England Retains Rate; QE

The Bank of England retained its record low interest and asset purchase programme on Thursday, after easing monetary policy at an unscheduled meeting last week.

The Monetary Policy Committee voted unanimously to maintain the interest rate at 0.1 percent and the quantitative easing at GBP 645 billion.

At a special meeting on March 19, the bank had reduced its bank rate by 15 basis points and expanded bond purchases by GBP 200 billion. The bank had reduced the rate twice this month.

The MPC said it can expand asset purchases further if needed.

The nature of the economic shock from Covid-19 is very different from those to which the MPC has previously had to respond, the bank said.

The scale and duration of the shock to economic activity, while highly uncertain, will be large and sharp but should ultimately prove temporary, particularly if job losses and business failures can be minimized, the bank added.

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