Bank of England keeps status quo amid gloomy outlook

The Bank of England froze its record-low interest rate and maintained its stimulus amount Thursday, one day after the government extended austerity measures and slashed official economic growth forecasts.

"The Bank of England's Monetary Policy Committee (MPC) today voted to maintain the official bank rate paid on commercial bank reserves at 0.5 percent," it said in a statement following its last monthly meeting of the year.

"The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion ($604 billion, 462 billion euros)."

The BoE's key lending rate has stood at 0.50 percent since March 2009, when the bank began pumping billions of pounds into the flagging British economy under its radical quantitative easing (QE) cash stimulus programme.

Minutes of the MPC's latest two-day gathering will be published on December 19 and provide an insight into the committee's thinking.

Thursday's announcements, in line with market expectations, come after the central bank last month warned that the growth outlook was clouded by the eurozone crisis, tight credit and inflationary pressures.

Under QE, the Bank of England creates cash that is used to purchase assets such as government and corporate bonds with the aim of boosting economic activity.

Across in Frankfurt, the European Central Bank was Thursday expected to keep eurozone borrowing costs at a record low 0.75 percent.

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