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Bank of England leaves quantitative easing policy and interest rates unchanged

The Bank of England has left interest rates unchanged at 0.5 per cent and will be keeping its stimulus programme of quantitative easing in place after the last Monetary Policy Committee meeting chaired by Sir Mervyn King.

Any change is seen as unlikely until the new central bank governor Mark Carney arrives on 1 July.

However, the Monetary Policy Committee has been considering increasing the quantitative easing programme to stimulate growth, with Mr King himself voting for an extra £25 billion to be pumped into banks.

The UK economy has shown some sign of recovery in recent times so an increase in quantitative easing could be unnecessary.

Construction, manufacturing and the services sector have all recorded strong activity in the last few weeks, which has boosted confidence.

Currently, the quantitative easing programme stands at £375 billion.

Stephen Gifford, director of economics at the CBI said: "The evidence of a budding recovery continued to build over the last month. So the Monetary Policy Committee's decision to hold off from further monetary stimulus was broadly expected."

By Claire Archer