Bank of England Leaves Rate Unchanged at 0.25%

The Bank of England on Thursday left its main bank rate unchanged at 0.25% and will maintain a program of bond purchases.

Since the bank’s August report, the UK economy has recovered from lows set immediately after the country’s referendum in which voters decided to leave the European Union. Preliminary estimates of gross domestic growth in the third quarter was above expectations, indicating the near-term outlook for the economy is stronger now than it was three months ago, the bank said.

“Household spending appears to have grown at a somewhat faster pace than projected in August, and the
housing market has been more resilient than expected,” the committee said in a statement on Thursday. “By contrast, investment intentions have continued to soften and the commercial property market has been subdued.”

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The committee said it voted unanimously to continue with programs to purchase up to 10 billion pounds ($12.5 million) of non-financial investment-grade corporate bonds and up to 60 billion pounds of UK government bonds, which would push the amount purchased to 435 billion pounds, all financed by the issuance of central bank reserves.

The Bank of England signaled no further rate cuts, at least through the end of the year. It also cut its growth forecast to 1.5% from 1.8%, but lifted its GDP outlook to 1.4% from 0.8% and its inflation outlook to 2.75% from a prior forecast for 2%.