Bank Of England Holds Key Rate At 0.5%, Marking 7 Years At Record Low

The Bank of England on Thursday kept its key interest rate at a record low of 0.5% and made no changes to its 375-billion-pound ($538 billion) asset purchase program. The vote was unanimous. Policy makers were expected to leave rates where they've been since March 2009, as the bank faces downside risk to U.K. growth and low inflation. Inflation remains "well below" the 2% target rate, "due predominantly to unusually large drags from energy and food prices, which are expected to fade in the coming months," the BOE said in a statement. The pound rose to $1.4389 from $1.4365 just before the announcement. The pound earlier Thursday had been climbing against the U.S. dollar , which was selling off after the Federal Reserve late Wednesday indicated it will slow the pace of interest-rate increases this year.

Copyright © 2016 MarketWatch, Inc.