GBP/USD Steady After BOE Leaves Rates Unchanged as Expected

The Bank of England held interest rates at a record low as expected on Thursday, as the country’s economy continues to hold up relatively well compared to its euro zone neighbors.

The central bank held its benchmark base rate at 0.5 percent, where it has been since March 2009, and maintained its asset purchase target at £375 billion ($564 billion)

Sterling was steady after the decision, trading at slightly lower against the dollar at $1.50 and up against the euro, at 1.20.

Minutes from the bank’s last meeting in December showed that policymakers remain divided on whether or not to hike interest rates in the U.K. Two of the nine members of the central bank’s Monetary Policy Committee – Martin Weale and Ian McCafferty – again voted for an interest rate hike in December.

The bank has been reluctant to increase rates while wage growth in the U.K. remained under pressure, but data released in December showed that wages grew in the three months to October. While the U.K. economy looks relatively robust, the outlook for its European counterparts is not so rosy.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza