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The British Monetary Policy Committee left the interest rate unchanged at 0.50% and the Asset Purchase Facility at   £275 billion, exactly as expected.  GBP/USD remained unchanged at around 1.5350 following this decision.

The recent expansion of the program is predicted to end at the end of January and expectations are rising for a rise in February.

Recent indicators support another round. The economy isn’t strong, despite some recent stability in the services sector. Manufacturing is still struggling, as seen in PMIs and also in the recent manufacturing production indicator.

Some expect the BOE to expand the program to 400 billion pounds during 2012. The first expansion of another 50 billion could happen in February.

A lot depends on the level of unemployment, which is on the rise in recent months, as well as GDP. There is high uncertainty if the economy contracted in Q4. In the US, it’s rather clear it didn’t, while in the euro-zone, chances are high that the economy squeezed during Q4.

The previous expansion send the pound crashing lower to 1.5271, but this was very temporary. QE2 in Britain didn’t have the same effect like QE2 in the US.

Yet more and more QE in Britain means more and more money printing and this eventually takes its toll in devaluing the currency.

Also in a technical perspective, Elliott Wave analysis for GBP/USD in 2012 points to lower ground.

But currently, the focus of the markets is on Europe.