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The British Monetary Policy Committee made no changes in policy. While this was highly anticipated, some had expected 25 billion pounds in additional QE.

The confirmation of no new QE boosts the pound and helps complete a full recovery.

The worsening situation in Europe lifted expectations for more QE, known in the UK as Asset Purchase Facility. However, with higher inflation and with the uber dove Adam Posen taking a pause from voting for more QE, a dovish shift in policy seemed unlikely.

The “wait and see” policy is likely to continue in the UK, as it does elsewhere. Also the interest rate was left unchanged, and isn’t expected to rise unless inflation leaps once again.

Earlier, manufacturing production exceeded expectations and rose by 0.9%, helping cable recover from an earlier slide. The pound continued gaining towards the rate decision and reached 1.6115. It is now at 1.6150 – where it was before the European worries began.

1.62 serves as some resistance, and the peak of 1.63 seen at the end of April is the highest since September. For more lines and analysis, see the GBP/USD forecast.

The focus now shift to the US, with trade balance and the weekly jobless claims published at 12:30 GMT. News from Spain and Greece continue dominating the news.