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In its last interest rate decision before a
national election on May 7, the Bank left its benchmark
borrowing rate at 0.5 percent, its level since the height of the
global financial crisis in 2009.
Britain saw the fastest growth among major advanced economies
last year and is expected to expand by as much as 3 percent this
year, despite a possibly weaker start to 2015. Pay growth is
also starting to pick up.
But at the same time, inflation has fallen sharply on the back
of the slump in global oil prices. It touched zero in February,
easing pressure on the BoE to start weaning the economy off its
very low borrowing costs.
All the Bank's rate-setters have voted to keep rates on hold
since the start of the year because of the inflation slump.
But its chief economist Andy Haldane surprised investors last
month by saying a rate cut was just as probable as a rate hike
because inflation might not rise as forecast over the coming
months.
The BoE forecast in February that inflation would touch its 2
percent target in two years' time.
Haldane's view has been challenged by other BoE officials.
Governor Mark Carney and other rate-setters have said they
expect the next move on interest rates will be a hike.
Economists polled by Reuters this month predicted a first rate
increase by the BoE in early 2016.
The signs that the Bank remains in no hurry to raise rates
helped push down the value of sterling against the dollar <GBP=>
to its lowest level in five years last month.
Top officials at the Federal Reserve said on Wednesday that a
U.S. rate hike remained a possibility as soon as June, despite
some weak economic data recently.
Investors are also waiting to see the outcome of Britain's
election which could produce no clear winner, according to
opinion polls.
The BoE said on Thursday it was keeping unchanged at 375 billion
pounds the stockpile of government bonds that it acquired after
the financial crisis as a further way to help support the
British economy.
The Bank made no statement alongside its rate decision
announcement. It is due to release minutes of the April meeting
in just under two weeks' time.
(Writing by William Schomberg; Editing by Susan Fenton)
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