The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.

The Committee also voted to continue with its programme of asset purchases, known as quantitative easing, totalling £175 billion financed by the issuance of central bank reserves.

The Committee expects the announced programme to take another month to complete, the scale of which will be kept under review.

Commenting on today’s decision, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

“Though we are not surprised by the MPC’s decision to keep Bank Rate at 0.5%, we are disappointed by their reluctance to increase the QE programme beyond £175 billion.

“There is worrying evidence that earlier hopeful signs of improvement in the economy are weakening. To counter serious risks of relapse, we urge the MPC to raise the QE programme to £200 billion.

“Persistent weakness in lending to companies, particularly to small businesses, is a serious risk that the MPC must address. To unblock impediments to lending, the MPC should cut the interest rate paid on deposits kept by commercial banks at the Bank of England, and make this rate temporarily negative. This would discourage hoarding of cash and encourage banks to lend.”