Bank of England takes 'wait-and-see approach' as interest rates held again » Central Government » 24dash.com

Further economy-boosting measures were put on hold today after the Bank of England opted not to extend its quantitative easing scheme.

The Bank has so far pumped £200 billion in newly-created money into the economy after finishing its latest round of assistance last week.

Today's wait-and-see approach from policymakers also saw interest rates held at 0.5% - continuing almost a year of record low borrowing costs.

Experts had widely predicted a no-change position from the nine-strong Monetary Policy Committee (MPC) after a surprisingly weak climb out of recession in the final quarter of last year tested resolve.

The UK's longest period of decline ended with growth of just 0.1% in the last three months of 2009, leading to fears of a so-called "double dip" recession.

As a result, some economists predict that the Bank will keep the door open to more QE if the economy continues to struggle.

The MPC had access to detailed economic forecasts from the Bank's forthcoming quarterly inflation report during their two-day meeting.

Recent signs on the economy have been underwhelming, with figures from the UK's crucial services sector showing slowing growth last month after disruption from the snowy weather.

Meanwhile, Consumer Prices Index inflation jumped at a record rate to 2.9% in December - well above the Bank's 2% target.

There are concerns among committee members that inflation may become a problem, although the weakness of the banking sector and credit availability is providing deflationary pressure.

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