United Kingdom Monetary Policy

United Kingdom

BoE maintains stance despite new mandate

On 20 March, the Chancellor of the Exchequer presented this year's budget along with a review of the Bank of England's (BoE) mandate, permitting it to "deploy new unconventional policy instruments or approaches in the future, including some of those deployed by other central banks in recent years". The move opens the door for more aggressive monetary policy stimulus in a manner similar to the U.S. Federal Reserve or the Bank of Japan.

Nevertheless, despite the new remit, at its latest monetary policy meeting on 3-4 April the BoE maintained both the Bank Rate at 0.50% and its amount of asset purchases at a total of GBP 375 billion. The minutes of the meeting will be published on 17 April.

All FocusEconomics Consensus Forecast panellists anticipate the BoE to remain on hold throughout this year. For next year, a majority of panellists also expect the Bank to leave interest rates unchanged at 0.50%, resulting in a year-end projection of 0.56%.


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United Kingdom Monetary Policy Chart

United Kingdom Monetary Policy April 2013

Note: Bank rate in %.
Source: Bank of England (BoE).

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