The Bank of England voted as expected today to keep its key interest rate at a record low 0.5% to support Britain's faltering economy but resisted calls to pump out more new money.
Its main lending rate has stood at an all-time low since March 2009, when the central bank also decided to begin injecting £200 billion sterling into the economy under a policy known as quantitative easing.
"The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%," a statement from the bank said.
"The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at 200 billion,'' it added.
Britain's central bank will provide reasons behind its decisions on September 21 when it publishes minutes from the latest monthly meeting.
The European Central Bank also kept its key interest rate steady at 1.5% today as the euro zone debt crisis undercuts growth in the 17-country bloc.
In Britain, which is not a member of the euro zone, some business leaders are calling upon the Bank of England to carry out more quantitative easing (QE), or the pumping out of new money via the purchase of government and private assets.
Britain's economy slowed sharply in the second quarter, posting growth of only 0.2% after 0.5% in the first three months of the year, according to recent official data. Opponents of QE argue that fresh stimulus would fuel inflation, which in Britain is already far above the Bank of England's target rate.
British 12-month inflation stood at 4.4% in July, while the Bank of England is forecasting it to hit 5% later this year, driven by soaring domestic energy bills. The bank's main task is to use monetary policy as a tool to keep the annual inflation rate close to a target of 2%.
