Bank of England says keeps interest rate at 0.25%

 The Bank of England said Thursday it was keeping its key interest rate at a record-low 0.25 percent, as it sees growth in Britain slowing less than expected this year.

AFP| Last Updated: Sep 15, 2016, 17:22 PM IST
Bank of England says keeps interest rate at 0.25%

London: The Bank of England said Thursday it was keeping its key interest rate at a record-low 0.25 percent, as it sees growth in Britain slowing less than expected this year.

Following a regular monetary policy meeting, the BoE said it expected "less of a slowing in UK GDP growth in the second half of 2016" following better-than-expected economic data in the wake of Britain`s vote to exit the European Union.

However minutes from its latest monthly meeting stressed that the central bank could still decide to cut the rate further to just above zero percent before the end of the year.

The BoE meanwhile decided at its September meeting against increasing the amount of cash stimulus pumping around the British economy.

Alongside its quarter-point rate cut in August, the BoE also agreed to re-activate its quantitative easing (QE) bond-buying scheme, lifting it by £60 billion ($79 billion, 71 billion euros) to £435 billion in the first increase since 2012.

The rate cut had meanwhile been the BoE`s first change to borrowing costs since early 2009, or height of the global financial crisis.

Analysts still widely expect the BoE to cut the rate to 0.10 percent in November, with recent solid data expected to sour in the coming months because of uncertainty linked to Brexit.

BoE governor Mark Carney last week claimed the UK economy was holding up well thanks in part to the bank`s emergency action taken in August -- and warned the UK still risked falling into recession, even if that risk had lessened in recent weeks.