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Bank of England Maintains Interest Rate and Stimulus Program – NYTimes.com

LONDON — The Bank of England decided Thursday to keep its benchmark interest rate unchanged at a record low as the British economy struggles to recover amid the government’s austerity program and troubles in the euro zone.

Britain’s central bank kept its main interest rate at 0.5 percent, where it has been since the beginning of 2009. It also maintained its stimulus program of government-bond purchases at £325 billion, or around $500 billion.

A slump in manufacturing activity in May that was much bigger than expected had prompted many economists, including at Deutsche Bank and JPMorgan Chase, to bring forward their expectations for more stimulus by the central bank. The Bank of England governor, Mervyn A. King, had hinted that the central bank’s rate-setting committee was open to further stimulus should the economy deteriorate.

via Bank of England Maintains Interest Rate and Stimulus Program – NYTimes.com.

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