Bank of England leaves QE, interest rates on hold

LONDON, Jan 10 (Reuters) - The Bank of England kept its

powder dry on Thursday, voting as expected not to buy more

government bonds despite the economy teetering on the verge of

another contraction.

After a two-day meeting, the BoE's nine-member Monetary

Policy Committee said its main interest rate would stay at 0.5

percent and that it would not extend its gilt purchases beyond

the 375 billion pounds' worth ($600 billion) bought so far.

None of the 64 economists polled by Reuters had expected a

change in interest rates or in the BoE's total target for

quantitative easing.

Worries about Britain's stubborn inflation are likely to

have dissuaded policymakers from taking further action this

month, while they await clearer signals on the health of the

economy and further indications on the progress of a central

bank scheme aimed at boosting lending.

Economists are roughly split on whether the BoE will restart

its asset purchases in future, although no restart is expected

before February at the earliest, when the BoE publishes its next

quarterly economic update.

The BoE will release the minutes of its meeting on Jan. 23.

Most Popular in Business