BOE maintains rate, QE stock, as expected

    The Bank of England (BOE) left its benchmark Bank Rate at 0.50 percent, as widely expected, along with the stock of assets purchased at 375 billion pounds.
    The BOE, the central bank of the United Kingdom, also said in its usual brief statement following a meeting of its Monetary Policy Committee that the minutes of its meeting would be released on Wednesday, Dec. 17.
     Two of the nine members of the MPC have already voted four times to raise rates by 25 basis points, arguing it is necessary for the BOE to stay ahead of an expected increase in wages.
    Minutes from previous meeting on Nov. 5-6 included the phrase that there was a "material spread of views" among the majority while the BOE in its November inflation report lowered its growth and inflation forecasts from August in response to "the spectre of economic stagnation" in Europe and softer global growth.
    The BOE cut its growth forecast for 2015 growth to 2.9 percent from a previous 3.1 percent and its 2016 forecast to 2.6 percent from 2.8 percent. In the third quarter of this year, the U.K. Gross Domestic Product expanded by 0.7 percent from the second quarter for annual growth of 3.0 percent, down from 3.2 percent.
    Headline inflation rose to 1.3 percent in October from 1.2 percent the previous month but has been below the BOE's 2.0 percent target for 10 months.

    In response to the BOE's cut in its growth forecast, financial markets pushed back their expectations for the first rate rise to late 2015.
    The BOE has maintained its key rate at essentially zero since March 2009, when it also embarked on asset purchases to keep down long-term interest rates, known as quantitative easing.

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