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No change was made in the British policy – the benchmark interest rate remained unchanged at the historic low of 0.50% and the capacity of the Asset Purchase Facility (or QE) remained unchanged at 275 billion pounds. This decision was widely expected.

GBP/USD is ticking up after the release, moving from 1.57 to 1.5715.

British inflation remains elevated, but the Bank of England expects it to drop sharply, together with the economy. Unemployment is on the rise in the UK.

Mervyn King and his colleagues could certainly expand the QE program in the next meeting in January. The current 75 billion plan is expected to run its course in January.

GBP/USD was trading around 1.57 before the announcement. Earlier it rose above 1.57. Yesterday it moved up from the 1.5530 – 1.5630 range to higher ground in a sharp move.

For more levels and analysis, see the GBP/USD forecast.

The more important and anticipated rate decision comes from Europe today. Mario Draghi is expected to cut the rate by 0.25% and present more steps to help the banks.

See the ECB preview for details.

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