No change in the British monetary policy, as expected. The Monetary Policy Committee in the UK decided to leave the interest rate unchanged at 0.50% and to maintain the current Asset Purchase Facility (QE program) unchanged at a scale of 375 billion pounds.
GBP/USD traded just above the 1.61 level before the announcement, after making another failed attempt to break above 1.6130 beforehand. The pair is now edging a handful of pips higher after sliding at first.
Earlier in the week, Markit reported a series of unexciting PMIs: construction and manufacturing are contracting, while services is hardly growing. The UK’s trade balance deficit grew to 9.5 billion pounds, a bit worse than 8.7 that was predicted.
GBP/USD made it up to the high wide range of 1.60 to 1.63 after the announcement that BOC’s MArk Carney will head Bank of England from the summer of 2013. However, the pair has gone too far.
There still is a chance that the BOE, under the current governor Mervyn King, will expand the QE program.
For more, see the GBPUSD forecast.
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