Rates on hold amid signs of recovery

The Bank of England’s monetary policy committee on Thursday voted to keep rates unchanged at 0.5 per cent and to continue with its £200bn quantitative easing programme as further signs of stabilisation emerged across the economy. The decision was widely expected, with the Bank having signalled it intends to make big decisions on monetary policy only when the forecasts in its quarterly inflation report are available. February, therefore, could see the first change in the Bank’s monetary stance since its November decision to increase the scale of quantitative easing –- which has taken the form of purchases mostly of government debt, funded by the creation of money – from £175bn to £200bn. With about £7bn left of that left, most economists expect the Bank to halt the programme, having already slowed the pace from £75bn every three months to £50bn earlier last year to £25bn in November.