On 7-8 November 2012 The Bank of England?s Monetary Policy Committee today voted to maintain the official

Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset
purchases financed by the issuance of central bank reserves at ?375 billion.
By using relevant theoretical concepts and models, critically discuss this decision of the MPC, and
specifically pay attention to the following two questions:

1) What is the official Bank Rate and what macroeconomic and financial circumstances justify the decision of
the MPC?
2) What is the asset purchase programme and what effects does it have on macroeconomic performance in the
UK?