MPC Votes to Hold Steady on Current Interest Rate Level and QE Programme
The Bank of England’s Monetary Policy Committee voted another time to leave the current interest rate at its historical low level of 0.5%. It also voted to leave the current quantitative easing program at £375 billion. Many experts had voiced concern that the MPC need to vote for adding more money into the economy to boost it from its sluggish growth. The mode of the meeting will not be known until the minutes are released on April 17.
Those that had hoped to avoid further stimulus through the QE programme feared that the sterling would weaken. Still there are many that believe more QE will be necessary due to the weak economic outlook and the possible third recession looming. Should more QE be voted upon it could be as early as May according to many economic experts for that is when the quarterly economic forecasts are updated. The forecasts will precede the new Bank of England governor, Mark Carney, who will take over in July. Mr. Carney is currently the governor of the Bank of Canada.
The decision by the MPC to leave the interest rate at 0.5% is not expected to have an impact immediately on lender’s offers on mortgage lending. Remortgage and purchase mortgages are currently very attractive with low interest rates and many offering free incentives with their packages. Remortgage demand is expected to increase in the next few months as homeowners choose to take advantage of the current offers and higher loan to value levels that are available.