Thursday June 4, 12:24 PM
Bank of England holds key interest rate at 0.5%
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LONDON (AFP) - The Bank of England decided on Thursday to hold its key interest rate at a historic low level of 0.5 percent and said it would continue with a programme to boost lending in recession-hit Britain.
"The BoE's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5 percent," the British central bank said in a statement.
"The Committee also voted to continue with its programme of asset purchases totalling 125 billion pounds (145 billion euros, 204 billion dollars) financed by the issuance of central bank reserves."
The BoE launched its so-called quantitative easing (QE) scheme in March in an attempt to beat the international credit crunch that has crippled economies worldwide.
The BoE added on Thursday that completion of the programme would take another two months, while the scale of the purchases would be kept under review.
Under QE, the central bank purchase government bonds from commercial banks in the hope of kick-starting lending to businesses and individuals.
Later on Thursday, at 1245 GMT, the European Central Bank was expected to hold its key lending rate at 1.0 percent as it also explores new ways to get money flowing again in the recession-blighted eurozone.
The BoE's latest decisions took place against the backdrop of local and European elections in Britain on Thursday, with Prime Minister Gordon Brown heading for a battering at the polls.
Minutes from this week's MPC (A050540.KQ - news) interest rate gathering will be published on June 17.
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