Bank of England keeps QE on hold as Eurozone growth stalls

The Bank of England today announced there would be no increase in Quantitative Easing (QE) this month, helping sterling to hold on to recent gains against other currencies. More QE would have been likely to hurt sterling, but there will be no extension to the current £275bn programme at least until November. Meanwhile in Europe amid the ongoing political turmoil in Italy and Greece, Eurozone growth forecasts for 2012 have been cut from 1.8% to just 0.5% – dangerously close to recession. The Euro would perhaps have weakened more today if new hope for Greek acceptance of a bailout deal hadn’t emerged as new Prime Minister Lucas Papademos took office this morning. Any ratification of the deal is likely to strengthen the Euro significantly and could dramatically reduce rates for sending Euro payments.