Bank of England Maintains Monetary Policy, For Now
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(eToro Blog) The Bank of England’s MPC announced earlier that it would make no changes to current monetary policy, which includes a 0.5% benchmark interest rate and £325 billion in asset purchases. Markets had been cautiously optimistic that the U.K. central bank would heed the numerous calls for additional accommodation which would give the economy a much-needed lift.
Recent economic data has been mixed, but positive data like today’s PMI service sector release tended to support the MPC’s decision. According to the statement which accompanied the announcement, one fundamental concern is that stubborn inflation could be exacerbated with any additional stimulus, with the Bank’s target of 2% likely not being met for at least nine months beyond their original analysis.
Even so, policy makers said they will cast a wary eye on the crisis in the Eurozone and would be ready to react if economic prospects worsened as a result.
Copyright 2012 eToro Blog
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