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BoE unexpectedly left interest rates unchanged

Thursday, Jul 14 2016
The Bank of England kept interest rates unchanged on Thursday, wrong-footing many investors who had expected the first cut in more than seven years as Britain's economy reels from last month's Brexit vote. The Bank said it was likely to deliver stimulus in three weeks' time, possibly as a "package of measures" once it has assessed how the June 23 referendum decision to leave the European Union has affected the economy.
"In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the Committee expect monetary policy to be loosened in August," the Bank said in minutes of its July meeting which ended on Wednesday.
 
"The precise size and nature of any stimulatory measures will be determined during the August forecast and Inflation Report round," it said. Most economists taking part in a Reuters poll had expected the central bank to halve its Bank Rate to 0.25 percent in order to cushion the economy from the shock of the Brexit vote.
 
Sterling is currently being traded few points above 1.33 level. Pair is likely to find support around 1.31 handle and resistance above 1.3450 level.
More in this category: « Australian Unemployment Rate rose to 5.8% US PPI up by 0.5% »

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