Bank of England holds position
Bank of England officials are trying to assess if the worst of Britain's recession is over by sticking to the current plan. They have decided to buy bonds with GBP125 billion of newly printed money and keep the interest rate at 0.5%. The bank also decided to refrain from expanding its asset purchase plan, which dashed some predictions that they would spend the full GBP150 billion authorized.
The bank's decision sent bonds tumbling, but Monetary Policy Committee Governor Mervyn King thinks the plan is positive. The Bank of England said today that it will wait until it has new inflation forecasts in August before it decides the next step.
The bond and interest rate decisions have the sterling's currency exchange rate at EUR1.1614 and USD1.6258.
The rates quoted above are interbank rates. Client rates may vary according to the volume and timing of the trade.