国际英语新闻：Bank of England holds interest rates at 0.5%

LONDON, Dec. 10 (Xinhua)-- The Bank of England's Monetary Policy Committee (MPC) Thursday said it would hold bank interest rates at 0.5 percent.

    This is the ninth month in a row that interest rates have been at an historic low of 0.5 percent.

    The MPC also agreed not to increase the amount of money it is pumping into the economy under its Quantitative Easing (QE) program.

    Experts had predicted that there would be no change in the rate this month, as it comes just after the Chancellor of the Exchequer Alistair Darling's pre-budget report (PBR) Wednesday, and the MPC would need more time to digest the contents of the PBR.

    The Confederation of British Industry (CBI), which represents private businesses totaling about a third of the private sector, reacted to the Bank of England's decision, saying it was unsurprised.

    Ian McCafferty, CBI Chief Economic Adviser, said: "It's not a surprise that the Bank has taken no new action, as the latest round of quantitative easing announced last month is due to continue until February.

    "Economic growth will be anemic at best across 2010, so the Bank will have to continue looking to monetary policy levers for some time yet, and interest rates are likely to remain low for some time."

    QE is the input of new cash into the economy to maintain liquidity. This monetary policy is most likely to be used when interest rates are very low, as they are at the moment in Britain. Under the program adopted by the Bank of England in it buys financial assets like bonds financial institutions in return for new cash. The aim is for the financial institutions to use the new cash to boost loans to businesses and individuals.

    On Thursday, the MPC agreed to stick to its already revealed plan, decided on in November, to buy 200 billion pounds (about 325 billion U.S. dollars) of government bonds before the end of February next year, as part of the QE program.

    The MPC would have taken into account figures released earlier this week which showed that the country's GDP in the third quarter of this year had contracted by 0.3 percent. This was the fifth quarter in succession that the economy had contracted. With news on Wednesday that Italy's GDP had begun to increase again, Britain is now the only G20 nation to still remain in recession.

    Chancellor Darling predicted in his PBR that there would be a modest return to growth in 2009 Q4, but economic figures released earlier this week made more somber reading.

    The Office for National Statistics on Tuesday said industrial production in Great Britain was unchanged in October from the previous month. However, compared to the same month last year, production fell 8.4 percent. Economists had forecast a 0.4 percent monthly rise and a 7.7 percent year-on-year decline.

    Manufacturing output was also flat in October, recording a 7.8percent fall from the level seen in October 2008. Economists had forecast a 0.4 percent monthly rise and a 7.2 percent annual fall.

    The committee, chaired by the governor of the Bank of England Mervyn King, consists of nine members, four appointed by the Treasury. In the event of a tied vote, the chairman, always the Bank's governor, has the casting vote.

    The MPC was created by current British Prime Minister Gordon Brown in 1997, when he first took up the post of Chancellor of the Exchequer when Labour won the general election.

    Prior to that the decision on whether to cut, raise or hold interest rates was taken by the Treasury. Brown's reasoning in handing the responsibility to the Bank of England was to remove some of the political motivations behind rate changes.

    MPC meetings are held each month, usually towards the beginning of the month, and the decision is announced immediately. The details of their deliberations are released after a fortnight.