Bank of England votes to keep rates at record low

London: All nine members of the Bank of England's Monetary Policy Committee voted to keep interest rates at a record low of 0.5 per cent and maintain the £200 billion (Dh1.17 trillion) asset buying programme in December, as expected.

Minutes of the December 9-10 meeting, published yesterday, showed policymakers felt little had changed since November when they expanded quantitative easing (QE) by £25 billion cash pumped into the economy by buying assets, mostly gilts.

The November decision, however, had been split. Chief Economist Spencer Dale had favoured no QE expansion while external member David Miles wanted a £40 billion increase.

The December minutes said those who had sought a different outcome in November still thought "a slightly different scale of asset purchases could still be justified".

"But the lack of significant news on the month meant that the case for deviating from the programme of asset purchases announced in November was outweighed by the benefits of completing it as planned," the minutes said.

Sterling fell slightly after the publication of the vote.

On current plans, the QE programme is scheduled to be completed before the BoE publishes its next inflation forecasts in February.

Wound down

Most analysts expect the scheme to be frozen at that month's meeting and for it to be eventually wound down as the economy recovers.

"It's [the minutes] still consistent with our view that they will finish QE at the end of January and won't do any more," said George Buckley, chief UK economist at Deutsche Bank.

Britain has been in recession for at least 18 months, the longest period of contraction since the Second World War, but is showing signs of recovery. Policymakers expect growth to return in the fourth quarter of this year.