LONDON, Sept 5: The Bank of England has maintained its key lending rate at a record low 0.50 per cent and frozen its cash stimulus amount, it said on Thursday amid Britain’s improving economic recovery.

“The Bank of England’s Monetary Policy Committee at its meeting... voted to maintain the official Bank Rate paid on commercial bank reserves at 0.50pc,” a statement said. It added that the amount of quantitative easing (QE) stimulus would remain at 375 billion pounds ($586bn, 444bn euros).

Thursday’s announcement followed a two-day meeting that ended on Wednesday, and was the first official monetary policy decision by the central bank since new governor Mark Carney last month launched its radical “forward guidance”.

In a change of practice, the Bank of England (BoE) had in August said that any rise in record-low interest rates would be tied to a drop in British unemployment.

Under the new strategy, the rate will remain at the current historic low of 0.50pc until Britain’s unemployment rate falls to at least 7pc.

Such a drop in the unemployment rate is not expected to occur for three years, according to BoE forecasts.

However, recent bright economic data has sparked speculation that unemployment could fall faster than anticipated, forcing the bank to start hiking rates in the first half of 2015.—AFP