Bank of England Holds Rates at 0.5%, Maintains Purchase Program

The Bank of England kept it benchmark rate at a record low 0.5% and maintained its bond purchase program at £200 billion ($309 billion).

The bank, which sets monetary policy for the United Kingdom, has kept rates low to stimulate the recovery in the U.K. economy.

The bank's monetary policy committee is unlikely to expand its stimulus programs unless it sees signs that economy is starting to contract again, according to economists at Daiwa Capital Markets.

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The economists expect that outcome to be "narrowly avoided," MarketWatch reported.

The U.K. economy expanded by 1.2% in the second quarter. Growth is expected to slow in the third quarter, while the government is gearing up to implement budget cuts.

"If, as we expect, growth shows sharply in the months ahead, then options for further stimulus are likely to start dominating the MPC's policy agenda," economists at Lloyds TSB wrote.

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