Currency Analyst since 2010

GBP: Bank of England's meeting

The Bank of England left its key interest rate unchanged at historically low level of 0.5% on Thursday. The bank also left unchanged a stimulus program of holding 375 billion pounds in government bonds that it has bought over the past five years.

The main risks for the British economic recovery are lower-than-expected wage growth and the negative impact of the continued weakness in the euro area.

The policy makers in Britain are increasingly divided over how soon to begin raising rates. Martin Weale and Ian McCafferty have been voting for higher rates since August, but the majority of the Monetary Policy Committee thinks that the economy isn’t ready for such a move.

All in all, in the past few months the pressure on the BoE to raise rates declined because of slowing growth and inflation, particularly due to the cooling with house price growth. So, all in all, the central bank is now expected to start tightening policy rather later than earlier.

Next week the Bank of England will update forecast for growth and inflation in Britain.

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