The Bank of England left interest rates at a record low of 0.5 per cent for the seventh month running today and said it would keep its £175 billion pound asset buying programme in place.
Focus will now switch to the November meeting when the Monetary Policy Committee will have new economic forecasts,
though most analysts do not expect the BoE will change policy then either given Britain may now be emerging from recession.
But a sizeable minority still see a further expansion of the quantitative easing programme which pumps money into the economy because any recovery is likely to be fragile.
BoE governor Mervyn King had actually wanted to raise the QE total to £200 billion in August but, along with two other members, was outvoted by the rest of the MPC.
In either case, policy is likely to remain loose for months yet as policymakers around the world have been stressing
now is not the time to withdraw the extraordinary support they have ploughed into their economies over the last year.
British economic output in the second quarter of 2009 was 5.5 per cent lower than a year ago and policymakers are worried it will take years for the level of GDP to get back to where it once was, entailing huge job losses in the interim.
And while most recent data have pointed to the worst being over for the economy, figures this week showing a shock 1.9 per cent fall in August manufacturing output raised doubts over whether the economy started growing again in the third quarter.
Today marks the first anniversary of the major central banks' surprise coordinated rate cut to bolster confidence after the collapse of Lehman Brothers.
Reuters