10 January 2013 12:00 [Source: ICIS news]
LONDON (ICIS)--The Bank of England (BoE) on Thursday held UK interest rates at 0.5% and left quantitative easing (QE) levels at £375bn (€457bn, $605bn), on the back of tentative economic growth in the UK in recent months.
The bank last added to its QE programme in July 2012, unlocking an additional £50bn in new stimulus funding. Interest rates have been pegged at 0.5% since March 2009.
The UK economy expanded by 0.9% in the third quarter of the year, according to the Office for National Statistics. Although the figure was revised down from earlier estimates of 1%, the quarter’s economic expansion followed three quarters of negative growth, and was the strongest since the third quarter of 2007.
UK trade body the British Chamber of Commerce (BCC) released its latest quarterly economic survey earlier this week, which indicated that the momentum of the third quarter continued through to the end of 2012, with manufacturing and service sector performances improving quarter on quarter in the last three months of the year.
However, the UK economic environment is likely to remain challenging for the foreseeable future, according to BCC chief economist David Kern.
He said: “We expect modest GDP recovery in 2013 and 2014, but it is clear that UK growth remains inadequate and must be boosted further. The economic environment will remain challenging, both globally and in the UK, with a prolonged period of below-trend growth.”
The UK’s FTSE 100 index was trading at 6,104.35 as of 09:39 GMT on Thursday, marking a return to levels last seen before the collapse of Lehman Brothers heralded the onset of the global financial crisis. The level is the highest since 19 May 2008.
(€1 = £0.82, $1 = £0.62, $1 = €0.77)
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