MPC keeps base rate and quantitative easing on hold again

The Monetary Policy Committee voted unanimously to keep the base rate on hold and maintain the quantitative easing programme at £275bn earlier this month, minutes of the meeting have revealed.

All nine members opted to keep the base rate at its historic low of 0.5% and voted for no more QE at their January meeting, as they have for the last two months.
The minutes show that the MPC judged the majority of large banks have not yet passed on higher funding costs to their lending rates fully, meaning there is a risk of tightening credit conditions in the near term.

They also reveal that there has been little change in inflation expectations, with MPC members believing that inflation will continue to fall sharply in the coming months.

The MPC says considerable downside risks from the global economy remain, but notes that there have been positive developments over the past month, with actions by the European Central Bank helping reduce the immediate risk of severe difficulties in the European banking sector.