Thursday, August 7, 2014

BOE maintains rate at 0.5%, QE stock, as expected

    The Bank of England (BOE) maintained its Bank Rate at 0.5 percent, as widely expected, along with the stock of asset purchased at 375 billion pounds.
    In a brief statement, the BOE's policy-setting Monetary Policy Committee (MPC) also said its latest forecasts would appear in the next inflation report to be published on Aug. 13 and minutes of its latest meeting would be published on Aug. 20.
    The BOE is expected to become the first central bank among the world's major central banks to raise rates since the 2007-2009 global financial crises.
    The BOE has maintained its rate at essentially zero since March 2009, but financial markets currently expect rates to be raised early next year as the U.K. economy continues to improve and the level of slack is absorbed.
    Economists expect the first vote to raise rates among the MPC's nine members could have been cast at today's meeting though this will first be known on Aug. 20 when the minutes are released.

    Inflation in the United Kingdom rose to 1.9 percent in June from 1.5 percent in May while the unemployment rate fell to 6.5 percent in May from 6.6 percent in April, the fourth consecutive month of a declining jobless rate.
   The U.K.'s Gross Domestic Product expanded by an unchanged 0.8 percent in the second quarter from the first quarter for annual growth of 3.1 percent, up from 3.0 percent in the first quarter.



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