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MPC leave UK base rates unchanged

In a move which was widely expected, the MPC has decided to leave UK base rates on hold at 0.5%. However, it has been confirmed that an additional £50 billion will be added to the UK government's quantitative easing fund which now stands at a substantial £125 billion. While initially the UK currency had recovered markedly against the dollar and the euro, there was a significant fall back after the MPC announcement although many believe this is simply profit-taking.

While there are some parties in the UK who were calling for a reduction in UK base rates and others who were calling for an increase in base rates, the Bank of England is taking a relatively safe route by allowing the UK economy to "settle down". With at least one further month to see how the quantitative easing program is progressing, it will be interesting to see if we hear any thoughts of recovery at next month's meeting.

As we covered yesterday, the decision to leave UK base rates at 0.5% is very disappointing to UK savers although it may well give those looking for a mortgage the chance to consider a fixed term arrangement. In all honesty today's MPC announcement was really a non-event.

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