British central bank keeps interest rates at 0.5%

The Bank of England decided to keep interest rates at 0.5 percent and continue the quantitative easing policy, according to meeting minutes released on Wednesday. The bank's Monetary Policy Committee (MPC) said after a monthly meeting on Sept. 3-4 that based on discussion on financial market, economic situation domestically and internationally, money, credit, demand and output, and supply and costs and prices, all the nine members voted unanimously to maintain the bank rates at historical low level of 0.5 percent and the stock asset purchases financed by the issuance of central bank reserve at 375 billion pounds. The MPC members believed that data regarding the global economy had been mixed, with encouraging signs in Britain's major advanced-economy trading partners, but with downside risks appearing to intensify in some emerging economies. They agreed the British economy had shown signs of strengthening, estimating that the initial estimate of output growth in the third quarter would be around 0.7 percent, compared with the 0.5 percent expected at the time of the August Inflation Report. "The early indicators for activity in Q4 tentatively suggested further strengthening towards the end of the year," said the minutes. "Overall, these data provided further evidence in support of the pickup in growth assumed at the time of the August Inflation Report and, if anything, posed an upside risk to that path." The British central bank said in early August that it would keep the interest rates at the record low until British unemployment drops to 7 percent or below, which is forecast to last until late 2016.