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Bank of England leaves interest rate at 0.5%

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The Bank of England on Thursday voted to keep its main interest rate at 0.50 per cent, opting for stability in its last meeting before next month's British general election.

[LONDON] The Bank of England on Thursday voted to keep its main interest rate at 0.50 per cent, opting for stability in its last meeting before next month's British general election.

As well as keeping the rate at a record-low level, policymakers decided to maintain the level of quantitative easing (QE) cash stimulus at £375 billion (S$753 billion), the BoE said in a statement at the conclusion of its monthly meeting.

"The Bank of England's Monetary Policy Committee (MPC) at its meeting today voted to maintain Bank Rate at 0.5 per cent," a statement said.

"The Committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion."

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Minutes of the meeting, outlining reasons behind the decisions, will be published on April 22. Analysts said the BoE would have decided to leave the main rate at 0.50 per cent - where it has stood for six years - as Britain risks deflation, or period of falling prices.

Howard Archer, chief UK economist at research group IHS Global Insight, added: "Any interest rate hike could be delayed if there is prolonged political uncertainty after May's general election and this has a dampening impact on economic activity, particularly business investment."

AFP

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