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BOE leaves interest rates at 0.5% and QE on hold at £325 billion

BOE leaves interest rates at 0.5% and QE on hold at £325 billion
May 10th, 2012
Author: Mike Paterson
The Bank of England’s Monetary Policy Committee decided today to keep interest rates at their historic low of 0.5% and to maintain the asset purchase programme at £325 billion.

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The full statement from the Old Lady: “The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £325 billion. The Committee’s latest inflation and output projections will appear in the Inflation Report to be published at 10.30am on Wednesday 16 May. The minutes of the meeting will be published at 9.30am on Wednesday 23 May.”

This was widely expected, although there had been some thought that QE might possibly be extended.

Interest rates have now remained unchanged since March 2009 when they also introduced the first stages of Quantitative Easing. We’ve seen a bit of GBP buying in the wake of the announcement as fears of further easing came to nothing, and now it remains to be seen whether this latest wave of buying can be sustained amidst public-sector strikes and other political pressures, let alone economic woes.

Bank Of England-FreeForo.com

Bank Of England-FreeForo.com

And in response to highly valued reader response I’d like to offer my heartfelt condolences to Birmingham City FC after their brave fight back last night and I’m sure your time will come next season. But hey, it’s much more fun in the Championship and think of the exotic places you get to travel to! Who needs the prawn sandwich brigade in Manchester anyhow?!!

And finally, hat’s off to another of my loyal readers for pointing out that it’s surely a sign of the economic hardships in Greece when the torch-lighting high-priestess can’t even afford a lighter…………..

Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.

Mike ‘Oscar’ Paterson has been in the Forex trenches for nearly three decades working as a senior Spot trader in London at UBS, Chief Dealer FX at the State Bank of Victoria and in charge of Spot CHF at Credit Suisse with a daily turnover in excess of $1.5 billion. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors in physical FX delivery as well as guiding those who wish to improve their currency trading. Mike also presents seminars and workshops and writes for a number of publications.
To contact Mike please call +0044 (0) 1732 700383 or email mike.paterson@economicvoice.com
The views expressed above are those of the author and should not be taken as investment advice. MSP Foreign Exchange Services will have no liability for, or to, any persons executing trades based on the content above.

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