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Bank of England split on rate

Staff Writer |
Policymakers of Bank of England decided to keep the key interest rate unchanged, in a split vote, and stood unanimous on quantitative easing.

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At the Monetary Policy Committee meeting, members voted 6-3 to maintain the benchmark rate at 0.50%.

Andrew Haldane, Ian McCafferty and Michael Saunders sought a quarter point rate hike as they had a higher degree of confidence that the slowdown in the first quarter was temporary or erratic and would largely be unwound, the minutes showed.

All members agree that any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent.

All nine members voted to maintain quantitative easing at GBP 435 billion.

The MPC said it intends not to reduce the current stock of purchased assets until Bank Rate reaches around 1.5% compared to the previous guidance of around 2%. Any reduction in the stock of purchased assets will be conducted at a gradual and predictable pace, the bank said.

Inflation is expected to pick up by slightly more than projected in May in the near term.

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