February 07, 2013 at 12:00 PM EST
Bank of England rejects more economic stimulus
The Bank of England has chosen not to inject any more money into the economy, leaving its quantitative easing (QE) programme at £375 billion. The Bank also left interest rates unchanged at 0.5%. Incoming Bank Governor Mark Carney has said he is open to reviewing the U.K.'s monetary policy framework. The BoE sets interest rates to achieve a certain level of inflation, but some believe its remit should include focusing on growth. The Bank has a 2% target for inflation on the consumer prices index (CPI) measure, and has leeway of one percentage point either side of that. Carney, who replaces Sir Mervyn King in July, told a panel of MPs on Thursday: "Flexible inflation targeting, in my opinion, is the most successful monetary policy framework that has been in existence. And so the bar for change to that framework, the overall framework, is very high. "But I would note that there seems to be an appetite for some debate about what exactly the framework is, and what alternatives could be to it, and that should be encouraged." On Wednesday, the Organization for Economic Co-operation and Development said the Bank should consider injecting more money into the economy if growth remains weak. The U.K. economy shrank by 0.3% in the final three months of 2012, and the Bank of England's Monetary Policy Committee (MPC) said it had taken that into account at its most recent meeting. Inflation has remained above the Bank's 2% target since the end of 2009.
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