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Bank of England freezes ultra-low interest rate

Xinhua, January 8, 2015 Adjust font size:

The Bank of England (BoE), the central bank of Britain, Thursday voted to maintain the benchmark interest rate at 0.5 percent.

The bank also voted to maintain the stock of purchased assets, or quantitative easing policy scheme, at 375 billion pounds (or 560 billion U.S. dollars).

It is the 70th successive month that interest rates stay at a historical low level. In the foreign exchange market on Thursday, the decision sent pound to drop to 1.5035 against the U.S. dollar, its weakest level since July 2013.

The bank also said it will reinvest 4.35 billion pounds this month related to maturing British government bonds, or gilts, from its 375-billion-pound asset purchasing program.

The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5 percent on March 5th, 2009. A program of asset purchases financed by the issuance of central bank reserves was initiated on the same day. The previous change in the size of that program was an increase of 50 billion pounds to the current level on 5 July, 2012, according to the bank.

During the monetary policy meeting last month, however, two out of the nine-member Monetary Policy Committee of BoE voted to raise the interest rate, and it was the fifth month of decision split among the MPC. Endit