(MENAFN- AFP) The Bank of England on Thursday left its key interest rate at a record low 0.50 percent against a backdrop of tepid inflation that is a threat to economic growth.
The central bank's monetary policy committee (MPC) opted also on Thursday to maintain its cash stimulus, or quantitative easing, at £375 billion ($587 billion, 477 billion euros).
"The Bank of England's MPC at its meeting today voted to maintain Bank Rate at 0.5 percent," it said in a statement issued after its regular monthly two-day gathering.
"The committee also voted to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion."
For further insight into the reasoning behind the decisions, traders must wait until December 17 for publication of the minutes from the meeting.
The Bank of England (BoE) decision came one day after the British government unveiled its last major budget update before next year's general election, but pledged to continue its tough austerity measures.
Chancellor of the Exchequer George Osborne admitted in his autumn statement that a key deficit-cutting target had been missed and vowed to continue with austerity policies, but revised up economic growth forecasts.
Bank of England policymakers will also have been mindful of weak inflation in Britain.
Britain's 12-month Consumer Price Index (CPI) rate edged up to 1.3 percent in October from a five-year low of 1.2 percent in September, recent data showed.
The CPI rate remains also far below the BoE's government-set target of 2.0 percent.
"Low inflation is likely to have meant that the MPC's decision to keep bank rate at 0.50 percent this month was straightforward," said Capital Economics analyst Samuel Tombs.
"And while signs that the recovery is maintaining its pace and pay growth is rising suggest that a majority to raise rates could be mustered by mid-2015, yesterday's autumn statement, which left an intensifying fiscal squeeze in place, suggests that rates are only likely to rise very slowly."
- Rate steady since 2009 -
In order to stimulate economic growth, the BoE had slashed borrowing costs to a record-low 0.50 percent in March 2009, when it also launched its radical QE stimulus policy.
The bank's main task is to use monetary policy as a tool to keep the annual inflation rate close to 2.0-percent.
The British central bank has held interest rates throughout 2014 despite ongoing turbulence from the neighbouring eurozone.
In November, the BoE predicted lower inflation despite long-awaited wages growth, leaving it unlikely to raise its record-low interest rate of 0.50 percent until late 2015, according to analysts.
"A spectre is haunting Europe -- the spectre of economic stagnation, with growth disappointing again and confidence falling back," BoE Governor Mark Carney said last month.
Britain, though not a member of the eurozone, counts the bloc as its main trading partner.
The BoE announcement was made ahead of a separate monetary policy decision from the European Central Bank in Frankfurt at 1245 GMT on Thursday.
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