Bank of England maintains policy rate

By Gokhan Kurtaran

LONDON

The Bank of England’s (BoE) Monetary Policy Committee has voted by a majority of 7-2 to maintain the policy rate at 0.5 percent, according to a statement released Thursday.

The Committee (MPC) also voted unanimously to maintain the stock of U.K. government bond purchases, financed by the issuance of central bank reserves, at £435 billion (over $588 billion).

The preliminary estimate of the U.K.’s GDP growth in the first quarter was 0.1 percent, 0.3 percentage points lower than expected in February, the bank said.

However, it is likely in part to have reflected adverse weather in late February and early March, according to the committee.

“Survey indicators suggest that growth was somewhat stronger in first quarter than implied by the preliminary estimate,” the committee added.

“CPI (consumer price index) inflation fell to 2.5 percent in March, lower than expected at the time of the February Report. The inflation rates of the most import-intensive components of the CPI appear to have peaked. The MPC judges that the impact of the past depreciation of sterling on CPI inflation, while remaining significant, is likely to fade a little faster than previously thought,” the committee said.