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BoE left interest rates unchanged

Thursday, Dec 15 2016
BoE left interest rates unchanged

The Bank of England kept its key interest rate at a record low and noted that the pound’s recent appreciation may mean a slower pickup in inflation next year. In its last policy decision of 2016, the Monetary Policy Committee said sterling’s advance could mean “less of an overshoot” above its 2 percent goal than previously predicted. It still sees a pickup in price growth and repeated its line that it has limited tolerance for exceeding its target.

 

Emphasizing its balancing act between managing inflation and growth, the MPC also said the economy will cool in 2017 as consumer spending weakens and the vote to leave the European Union rattles investment plans. The MPC, led by Governor Mark Carney, voted 9-0 to hold the benchmark rate at 0.25 percent and also unanimously voted to keep its two asset-purchase programs running as planned. After cutting the rate in August after the Brexit vote, it said on Thursday policy can now respond “in either direction” to the changes in the outlook.

 

Sterling is currently being traded around 1.25 level. Pair is likely to find support around 1.2450 handle and resistance above 1.2580 area.

Last modified on Friday, 16 December 2016
More in this category: « UK Retail Sales up by 0.2% US CPI inclined in line with market expectations »

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