The Bank of England’s Monetary Policy Committee (MPC) today voted to:

  • Keep the official Bank Rate at 0.5%, where it has been since 5 March 2009.
  • Continue with its asset purchase programme though the Asset Purchase Facility (APF), aka Quantitative Easing, currently set at £175 billion.

Purchases of almost £146 billion have been made under the APF since its use for monetary policy purposes was first announced after the March meeting.

The APF was initiated on 5 March 2009 as a £75 billion programme. On 7 May 2009 it was increased by £50 billion to £125 billion. Then again, on 6 August 2009, it was increased by another £50 billion to £175 billion. At the same time, the practice of Gilt-Lending was announced.

The Committee expects the announced programme to take another two months to complete. The scale of the programme will be kept under review.

Given the massive amounts of debt being incurred by the incumbent Government, and in light of credit ratings agencies putting UK national debt on watch pending possible downgrading, it is expected that further expansion of the APF is extremely likely.

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