Bank of England to keep interest rates same

The Bank of England kept interest rates unchanged at 0.10%. The November meeting took place amid the US election drama so it was easy to overlook.

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment. At its meeting ending on 16 December 2020, the Committee judged that the existing stance of monetary policy remains appropriate.

The MPC voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion.

The Committee voted unanimously for the Bank of England to continue with the programme of £100 billion of UK government bond purchases, financed by the issuance of central bank reserves, and also to commence the previously announced programme of £150 billion of UK government bond purchases, financed by the issuance of central bank reserves.

The near-term UK outlook has evolved broadly in line with the Committee’s expectations in the November Report. UK GDP grew by 0.4% in October, leaving it 8% below its level in 2019 Q4.