The Bank of England’s Monetary Policy Committee voted to maintain the official Bank Rate paid on commercial bank reserves unchanged at 0.5%, because of concerns about higher energy prices and the continuing economic crisis on the European continent.
The Bank of England might yet decide to expand its asset purchasing program next month, when the current round of stimulus is expected to end. Two central bank policy makers pushed for more stimulus last month, while the majority preferred to wait to get more clarity on the economic outlook.
The European Central Bank left its main interest rate unchanged at 1 percent on Wednesday. Recent signs that the euro zone economy was still struggling outweighed concerns by some economists about the risk of inflation, especially in Germany, Europe’s largest economy, and rising energy prices. Unemployment in the 17 countries that use the euro reached its highest level in 15 years during February, according to data published Monday.
The British economy shrank 0.3 percent in the fourth quarter of 2011, more than the 0.2 percent previously expected, the Office for National Statistics said last week, , New York Time reported.