Bank of England Holds Line on Interest Rate, Continues Asset Purchase

As expected, the Bank of England voted to maintain the current 0.5 percent interest rate and also pledged to continue buying gilts (debt securities issued by the British government) as part of its 200 billion pound ($318 billion) quantitative easing policy. Many analysts however, believe the Bank will wind down its spending early in the new year if signals point to a strengthening of the economy.

“We believe the BoE has done enough to ensure positive growth again but it will take time for GDP to rise back to its trend level,” said George Buckley, economist at Deutsche Bank.

“As such we believe the MPC will be cautious in tightening policy particularly given that households will be acutely sensitive to higher rates on account of high debt-to-income ratios,” he said.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.