Bank of England sits on its hands as rates held at historic lows

Peter Spence
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No change from the boffins over at Threadneedle Street.

The Bank of England's interest-rate setting committee has, as widely expected, elected to hold both interest rates and quantitative easing this month.

That sees rates at their historic lows of 0.5 per cent, and asset purchases at £375bn in April.

Ben Southwood, head of policy at the Adam Smith Institute, says that it's "the right choice" as the path of aggregate demand - measured by nominal GDP growth - as the current trend is "just about where we'd want it".

It would "certainly be inappropriate to tighten policy now", says Southwood, as nominal wages growing at just 1.4 per cent annually suggests there is still considerable slack in the labour market.

Writing in City AM today, PwC's Andrew Sentance suggests that now is the right time to raise rates, as the UK economy has seen a gradual improvement over the past 12 months.