LONDON Aug 1 The Bank of England made no
changes at its second policy meeting under its new governor,
Mark Carney, which ended on Thursday, keeping interest rates at
0.5 percent and leaving its bond-buying programme on ice.
The bank also made no announcement about an expected shift
in strategy to help Britain's economic recovery, under which it
could start providing guidance on how long interest rates are
likely to stay at their record low.
Finance minister George Osborne has asked Carney and the
rest of the BoE's policymakers to report to him next Wednesday -
at the same time as the bank's quarterly economic update - on
the merits of bringing so-called forward guidance to Britain.
The Monetary Policy Committee issued no policy statement on
Thursday, unlike at the first meeting chaired by Carney a month
ago when it warned investors against betting on a rise in
interest rates too soon.
Details of the latest discussions and the breakdown of votes
by the nine rate-setters are due to be released on Aug. 14.
At its previous meeting, on July 3-4, the MPC voted 9-0
against buying more bonds. Two members who previously supported
more asset purchases held off from calling for more quantitative
easing, pending the discussions on the new strategy.
Having kept borrowing costs at rock-bottom since 2009 and
spent the equivalent of a quarter of British gross domestic
product on government bonds, the Bank of England is turning to
guidance as a new way to get Britain's economy back to health.
Signs of a turnaround have begun to appear in recent months.
A reading of the country's manufacturing sector in July was
stronger than even the most optimistic forecast in a Reuters
But the economy remains more than 3 percent smaller than
before the financial crisis and is vulnerable to interest rates
creeping back up in financial markets, especially at the U.S.
economy picks up and exerts pressure on British debt prices.
The MPC's decision comes shortly before the conclusion of the
European Central Bank's monthly policy meeting, which could
provide more detail on its own plans to persuade markets that an
interest rate hike is not on the cards.
The U.S. Federal Reserve offered no hint after its latest
policy meeting ended on Wednesday that it plans to trim its
stimulus programme soon, saying the U.S. economy is recovering
but still needs support.