Bank Of England Leaves Rates Unchanged

The Bank of England decided to hold the interest rates unchanged at today's meeting, leaving it at the record low 0.5%. The decision came out exactly in agreement with the expectations, as the recent comments and statements from different BoE officials, combined with mixed economic data, made the case that a rate hike now would be premature.

The British economic recovery is sluggish at best and there is a general thinking within British monetary authorities that the current inflationary pressures will decline in medium to longer term, thus giving them room to first see how the recovery is moving, before hiking the rates. Most of the analysts believe that the earliest possible rate hike could come only in May.

After the decision, the British Pound (GBP) fell against the US Dollar (USD) and other major currencies. The GBP/USD dropped from 1.6190s to 1.6120s and is looking to extend its slide to below 1.61.

The British currency is trading lower against the Euro (EUR) and Japanese Yen (JPY), among other currencies, as well. The EUR/GBP moved higher from 0.8530s to 0.8570, while the GBP/JPY fell from 134.30 to 133.77.