Interest Rates and the Money Supply - Commons Library Standard Note

Published 03 February 2015 | Standard notes SN02802

Authors: Aliyah Dar

Topic: Economic policy, Economic situation

On 22 January the ECB launched a ‘quantitative easing’ (QE) programme that will buy €60bn assets (mostly government bonds of Eurozone countries) each month until at least September 2016. The ECB has implemented this programme to raise the rate of inflation to its 2% target (inflation was -0.2% in Dec 2014).

At their December meeting, the Bank of England's Monetary Policy Committee (MPC) voted to leave the Base Rate unchanged at 0.5%.

• Annual growth in M4 excluding intermediate other financial corporations (a measure monitored by the Bank of England Monetary Policy Committee) was 2.9% in November 2014, down 0.4% points from October.

• The value of notes and coins in circulation outside the Bank of England rose by 5.6% in December 2014 compared with a year ago, up slightly from November.

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