The Bank of England’s interest rate has been maintained at 0.5% for the fourth month in a row.

The Bank of England has maintained the interest rate at 0.5% for the fourth consecutive month.

The Bank of England’s Monetary Policy Committee (MPC) decided today (9 July) to keep the cost of borrowing unchanged and it will not extend the quantative easing scheme any further.

Quantative easing, also known as the asset purchase programme, was introduced as a way of stimulating the economy by creating more money to buy bonds. The current plan to spend £125 billion remains the same, despite some analysts predicting the amount to rise.

The MPC states that the quantative easing should be completed in a month’s time, when the Committee will review the success of the programme alongside latest inflation projections.

David Kern, Chief Economist at the British Chambers of Commerce, commented on the announcement: “We disagree with the decision not to use the final £25bn allotted to the asset purchase programme. Quantative easing is not yet fully effective and there is a strong case for raising the proportion of private sector assets that the MPC purchases.

“It is important to significantly increase the programme’s size, so as to underpin business confidence. We urge the Chancellor to increase the ceiling for the programme by a further £50 billion, to £200 billion.”

Many analysts had expected the interest rate to remain at 0.5% as a rise while the recession is in full force would have been close to impossible.