Bank of England maintains interest rates at 0.5%

The Bank of England's Monetary Policy Committee voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of £50 billion to a total of £375 billion on 5 July 2012.

Barry Naisbitt, Chief Economist at Santander UK, commented: "After the major change in the approach to monetary policy last month, the Monetary Policy Committee (MPC) was highly unlikely to do anything other than hold Bank Rate this month.  The main focus of attention has been the string of positive news on the UK economy since the last MPC meeting.  The survey indicators of activity have strengthened further in August, suggesting that GDP growth will be strong again in the third quarter, although the level of output remains below that reached before recession hit.  The announcement of an unemployment rate threshold for policy rate changes the focus on news a little and with the unemployment rate still at 7.8% the MPC will be hoping to see that reduce in the coming months."