United Kingdom Monetary Policy

United Kingdom

BoE stays put amid divided vote

At its 8-9 May policy monetary policy meeting, the Bank of England (BoE) maintained both the Bank Rate at 0.50% and the size of its asset purchase programme at a total of GBP 375 billion. According to the minutes, the Monetary Policy Committee's (MPC) central view was that "the UK economy was set for a modest and sustained recovery in both demand and effective supply - aided by the low level of Bank Rate, the Committee's programme of asset purchases, the extended FLS and the impact of the recommendations of the Financial Policy Committee". All nine members of the MPC voted in favour of keeping the Bank Rate unchanged at 0.50%. Meanwhile, a majority of six members were in favour of maintaining the asset purchase programme at its current size, mirroring the previous meeting's result. Governor Mervyn King and two other MPC members voted to increase the asset purchase programme by GBP 25 billion to a total of GBP 400 billion. The next monetary policy meeting is scheduled for 5-6 June. All FocusEconomics Consensus Forecast panellists expect the BoE to leave interest rates unchanged at 0.50% this year. For next year, a majority of panellists also expect the Bank to stay put, resulting in a year-end projection of 0.55%.


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United Kingdom Monetary Policy Chart

United Kingdom Monetary Policy May 2013

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

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