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Bank set to hold interest rates | Bank set to hold interest rates |
(about 7 hours later) | |
The Bank of England is expected to announce no change in policy when it reveals the outcome of its most recent meeting later. | The Bank of England is expected to announce no change in policy when it reveals the outcome of its most recent meeting later. |
The Bank is likely to hold interest rates at 0.5% and leave its £200bn asset purchase programme unchanged. | The Bank is likely to hold interest rates at 0.5% and leave its £200bn asset purchase programme unchanged. |
Last month, the Bank added £25bn to its quantitative easing programme, which involves printing money to buy assets from firms to stimulate the economy. | Last month, the Bank added £25bn to its quantitative easing programme, which involves printing money to buy assets from firms to stimulate the economy. |
It is expected to wait until the scheme runs out before taking further action. | It is expected to wait until the scheme runs out before taking further action. |
'Scene set' | 'Scene set' |
In November, the central bank said that the fragile economy and the risk of inflation falling below its target of 2% had led it to extend its quantitative easing scheme, which runs out in January. | In November, the central bank said that the fragile economy and the risk of inflation falling below its target of 2% had led it to extend its quantitative easing scheme, which runs out in January. |
But since then, the economic data has been largely positive. | But since then, the economic data has been largely positive. |
"Last month's decision set the scene until February, which we expect to be the next focal point for UK monetary policy," said Philip Shaw, economist at Investec. | "Last month's decision set the scene until February, which we expect to be the next focal point for UK monetary policy," said Philip Shaw, economist at Investec. |
"We would be shocked if there were any result other than the Bank rate remaining on hold and the QE target fixed at £200bn." | "We would be shocked if there were any result other than the Bank rate remaining on hold and the QE target fixed at £200bn." |
On Wednesday, Chancellor Alistair Darling said the economy would shrink by 4.75% this year and that consumer inflation would rise from 1.5% to about 3% early next year before falling back. |
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