BOE Holds Interest Rate, Quantitative Easing Unchanged

By Benjamin Spier,

THE TAKEAWAY: Interest rates and asset purchase plan remain unchanged following BoE decision -> Showdown set for the next month’s BoE meeting -> GBD/USD barely reverses daily losses following release

The Bank of England held its key interest rateat 0.50% for the 37 th straight month following its monthly meeting.It also kept the asset purchase target at 325 billion pounds. Boththe interest rate and the asset purchase plan were decided asexpected by analysts.

BoE Governor Mervyn King pushed for the 325 billion pounds of quantitative easing, because he said the UK’s predicament still feels like a crisis. The central bank’s board will likely take into account Q1 GDP numbers when debating the need for further stimulus and low interest rates at next month’s meeting.

UK inflation dropped to 3.4% in February from 3.6% the previous month, and the BoE maintains a 2% inflation forecast for the end of the year.

GBD/USD remained nearly unchanged following the BoE decision, rising only a few points after dropping 80 points earlier in the session. UK stocks seem unmoved in the short term by the BoE release, following an earlier day 30 point drop in the FTSE 100.
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/market_alert/2012/04/05/BOE_Holds_Interest_Rate_Quantitative_Easing_Unchanged.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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