Bank of England unchanged as expected

11 April, 2014

Rob Bastin

One week after the ECB announced an unchanged base rate and monetary policy, the Bank of England followed suite as expected. Rates continue to be held at 0,5% whilst the size of their bond-buying stimulus programme remains at £375bn as the markets continue to look ahead to 2015 before expecting any changes. Sterling exchange rates were about as uneventful as the announcement itself with rates consolidating at current peak levels after the gains seen earlier in the week.

The pound finds itself trading back near the best buying levels in the last 5 years against the US Dollar and 2 cents higher against the Euro than seen for most of March. Daily highs against the dollar were pulled back in the afternoon after US jobless claims figures came in better than forecast at £300k and the Import Price Index only dropped to 0.6% rather than down the the expected 0.2%.

As UK trading opens the latest Consumer Price Figures for Germany have already been released early this morning with inflation currently sat at the forecast 1%, down slightly from 1.2% in February but causing very little affect on the markets with result on par. The week’s economic calendar will be rounded up at lunch time when the US markets open with Producer Price Index figures at 1:30pm and Reuters Consumer Sentiment at 2:55pm.

In other related news the ratings agency Fitch, has passed comment on Scotland’s vote for independence saying that it would potentially delay the UK’s return to a triple A credit status as there would be a ‘one off’ increase in the UK’s debt if Scotland left the UK. Whilst Fitch still believes that a NO vote is most likely in September’s referendum, a YES vote would force a credit rating review of the UK.

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