Bank of England keeps interest rates 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 pounds.
In the United Kingdom, there have been further signs that a recovery is in train, although it remains weak by historical standards and a degree of slack is expected to persist for some time. Twelve-month CPI inflation rose to 2.7% in May and is set to rise further in the near term. Inflation, says the bank, should fall back towards the 2% target as external price pressures fade and a revival in productivity growth curbs domestic cost pressures.
The Committee noted that the incoming data over the past couple of months had been broadly consistent with the central outlook for output growth and inflation contained in the May Report.
In the light of these considerations, the Committee voted to maintain the size of its programme of asset purchases financed by the issuance of central bank reserves at 375 billion pounds. ■