The Bank of England’s Monetary Policy Committee voted on Thursday to maintain the current economic stimulus plans. This is its version of quantitative easing, similar to what is being seen in the United States and in Japan, albeit on a smaller scale. The Bank of England (BOE) plans to keep buying high-quality private sector assets on behalf of the Treasury by issuing Treasury bills in the same manner as in 2009 and 2011.
As part of the plan, the BOE will keep the official bank rate paid on commercial bank reserves at 0.5%. What is more important is that the BOE also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at 375 billion pounds.
The BOE’s latest inflation and output projections calendar will be released on Wednesday May 15. The minutes of the meeting will be published on Wednesday May 22.
The central bank concluded:
The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. A programme of asset purchases financed by the issuance of central bank reserves was initiated on 5 March 2009. The previous change in the size of that programme was an increase of £50 billion to a total of £375 billion on 5 July 2012.
Stocks are higher this morning, although today’s news was mostly expected. The FTSE 100 was up by more than three points at 6,857 so far this morning. In the United States, the S&P 500 futures are down by about a point and DJIA futures are down by only a few points.