July 9, 2009

BOE leaves key lending rate unchanged

The Bank of England's Monetary Policy Committee left its key bank-to-bank lending rate unchanged Thursday at 0.5 percent.

The historically low rate was set in March, the same month the bank began a $202.5 billion program of asset purchases.

The bank said Thursday it would take one more month to complete the purchases. The Monetary Policy would review the scale of the program again at its August meeting, the bank said in a statement.

Many economists had expected the bank to extend its qualitative easing program by $50 billion to push along a recovery that is wobbling, The New York Times reported.

The data across the board is still very weak. It feels more like the green shoots we saw were a step from the very bad first quarter rather than have a momentum behind them, said economist Simon Hayes at Barclays Capital in London.

The British Chamber of Commerce said this week the second quarter showed welcome progress, but industrial production dropped in May and housing prices are still in decline, falling 0.5 percent in June.