THE TAKEAWAY: BoE rates unchanged -> UK continues to experience Euro crisis fallout -> Cable strong on the day
The Bank of England today maintained its current stimulus package at 275B Pounds and kept its key interest rate at 0.5%. Both measures were in line with economists’ expectations. The BoE expanded QE measures by 75 billion Pounds in September, and UK officials were believed to see little point in fine-tuning the package before knowing where the Euro saga is headed.
The ECB today is expected to release its interest rate decision as well, and come have predicted that the bank may cut interest rates in a bid to break Europe out of its current growth stunt. Even so, ECB officials have recently been quoted as saying that lowering interest rates at this point will do little to nothing to stimulate growth in the beleaguered 170-nation bloc. Key European nations like France have been struggling to deal with the implications of a possible credit rating cut by Standard & Poor.
The Pound was strong on the day as Euro-linked currencies did well on optimism that the EU summit meeting tomorrow will produce a resolution to the crisis. EU officials have downplayed the event, citing poor consensus on the role to be played by international groups like the IMF.