UK Interest Rates Remain at Record Low for Sixth Year

UK interest rates have been on hold at an all-time low of 0.5% for six years after Bank of England policymakers voted for no change at their March meeting.

It was at their March 2009 meeting that the Bank’s monetary policy committee decided emergency measures were required to address extreme circumstances.

At that point, they lowered rates from 1% to 0.5% and in another unprecedented move for the then 315-year old institution, pushed the button on quantitative easing.

US investment bank Lehman Brothers had collapsed six months earlier with disastrous consequences. Money markets had frozen, and no one fully understood the scale of the crisis that was hurtling head-on towards the global economy.

By March 2009 the UK was in recession.

Under the then governor Sir Mervyn King, the Bank initially pumped £75bn of new money into the financial system by buying government bonds in an attempt to limit the worst effects of the crisis.

QE was ultimately expanded to become a £375bn programme, which was also left unchanged by the MPC at its Thursday meeting.

Philip Shaw, economist at Investec, said: “On the sixth anniversary of the introduction of QE and near-zero interest rates, the MPC left policy unchanged at this month’s meeting.

via The Guardian

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.