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Bank of England keeps interest rate

The Bank of England has kept interest rates at 0.5 per cent in December and has maintained money-boosting efforts at £200 billion under the Bank's quantitative easing (QE) programme.

The Bank ended the year as it started as policymakers held interest rates for the 20th month in a row.

Stronger-than-expected economic growth and a recent improved performance in the manufacturing sector has steadied the Bank's hand, despite expectations that the economy's rate of recovery would slow in the coming months.

The Bank of England last altered its monetary policy in November 2009, when it increased the level of QE from £175 billion to £200 billion. Interest rates were lowered to their historic low of 0.5 per cent in March 2009.

Experts expected the Monetary Policy Committee to leave policy unchanged after a higher-than-expected third-quarter gross domestic product (GDP) growth of 0.8 per cent was achieved.

The economic optimism was bolstered by strong official manufacturing figures earlier this week, which revealed that output rose 0.6 per cent month on month in October - the best reading since March and double what had been expected.

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