Friday 6 April 2012

BoE monetary policy unchanged as UK economy ekes out growth

The Bank of England maintained its monetary policy course on Thursday, keeping the total of its asset purchases at 325 billion pounds and holding interest rates at 0.5 percent.

An estimate by the National Institute of Economic Research on Thursday showed that the UK economy grew just 0.1 percent in the first quarter.

Underlying weakness in the UK economy had been suggested by an earlier economic report. Industrial production rose 0.4 percent in February, thanks to cold weather that helped to boost both oil and gas production and electricity generation. However, manufacturing output fell 1.0 percent.

Cold weather did not help German industrial production however. A report on Thursday showed that industrial production there fell 1.3 percent in February as construction output shrank 17.1 percent.

Amid the weak economic data coming out of Europe, the US economy continues to outperform. A report on Thursday showed that initial claims for unemployment benefits fell 6,000 to 357,000 in the week ended 31 March, the fewest since April 2008.

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