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BANK BASE RATE

If the Bank of England sets a negative interest rate, it could encourage lending.

Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion

 

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.  The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.The Committee reached its decisions in the context of the monetary policy guidance announced alongside the publication of the August 2013 Inflation Report.

 

Also in the context of that guidance, the Committee agreed to reinvest the £8.1 billion of cash flows associated with the redemption of the March 2014 gilt held in the Asset Purchase Facility.

 

Notice to Editors

 

 

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.

 

 

Information on the Asset Purchase Facility can be found on the Bank of England website at http://www.bankofengland.co.uk/monetarypolicy/Pages/qe/default.aspx.

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