Instant View: BoE leaves rates, QE on hold as expected

Following are economists' reactions to the decision.

PHILIP RUSH, NOMURA

"We still expect the MPC to be disappointed by the pace of growth and lean toward tapering out its purchases beyond May... So we maintain our forecast for 25 billion pounds of QE to be announced then, against the consensus expectation of no further increases, but acknowledge that an extension is a closer call and more data-dependent than it was in February."

LEE HOPLEY, EEF

"We weren't expecting to hear anything new from the MPC today following last month's increase in the bank's asset purchase programme.

"What data there has been over the past month won't have shifted the bank's view on the outlook for the economy or inflation since it set out its view in the Inflation Report, and May will still be the month to watch for any policy change."

HOWARD ARCHER, IHS GLOBAL INSIGHT

"Unchanged monetary policy in March completes three years of interest rates at 0.50 percent. A fourth year of interest rates at 0.50 percent looks highly probable and a fifth is far from impossible given the still difficult domestic and international conditions that the economy face.

"Our current view is that interest rates will not rise before late-2013 and the Bank of England could very well delay acting until 2014 given likely extended muted economic activity and the need to offset tight fiscal policy.

"While it is a stone dead certainty that interest rates are going nowhere for some considerable time to come, the outlook for quantitative easing is far less clear - although it is odds-on that the Bank of England will now sit tight until at least May.

"While we expect a final 25 billion pound dosage of QE to be enacted later this year (most probably in May) in response to likely ongoing fragile economic activity, it is very possible that the Bank of England could be done on the QE front barring a renewed serious downturn in economic activity."

IAN MCCAFFERTY, CBI CHIEF ECONOMIC ADVISER:

"This decision was expected as the current round of asset purchases is set to run until May.

"Since the MPC has been signaling that the current policy stance is broadly appropriate, it appears that the economic climate would have to deteriorate to prompt a further extension of QE.

"Nevertheless, with economic conditions fragile and the level of uncertainty high, monetary policy decisions are still likely to be finely-balanced."

(Reporting by UK Economics Desk)