Bank of England keep interest rates on hold and no more QE

Sterling gathered pace on Thursday after the Bank of England kept its quantitative easing program unchanged and interest rates on hold, pound/dollar rates pushed back to $1.6180 after the announcement after briefly dropping back into the high $1.60’s.

Some analysts had thought the BoE could add to the 325 billion pounds that has already been pumped into the UK economy in order to stimulate growth, especially after the U.K slipped back into recession on the back of poor Gross Domestic Product (GDP) data. Had the BoE increased their asset purchasing program we could well have seen rates fall further from the eight month highs of last week.

Further gains for cable may be limited over the coming weeks as concerns over the stability of the euro-zone continue. With so much uncertainty surrounding the Greek government, euro-zone chiefs today held back the latest instalment of the countries bailout package. This has led to investors pulling out of the single currency and head back to U.S dollar.

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