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Bank of England keeps interest rates unchanged, two members ask to cut purchasing program

  • Bank of England without big surprises: it maintains rates and purchases.
  • Two members of the MPC ask to cut the purchasing program.
  • The pound appreciates in the market.

The Monetary Policy Committee (MPC) del Bank of england (BoE), as expected, kept monetary policy unchanged, by not introducing changes in interest rates (0.10%), nor in the purchase program (£ 895,000 million).

The vote to sustain interest rates was unanimous (9-0), while with regard to the purchasing program, there were two members who disagreed (Saunders and Ramsden). They preferred a reduction of the purchase program to £ 840 billion.

The BoE lowered growth expectations for the third quarter to 1%, reflecting supply problems. He affirmed that the uncertainty about the labor market has increased.

They expect inflation to rise further in the short term, reaching levels above 4% in the fourth quarter. They see that cost pressures will be transitory. The BoE stated that there are unfolding issues that reinforce the case for a moderate tightening in policy.

The libra it had limited impact after the announcement and fell modestly against the dollar and euro initially, but then gained momentum and rose strongly reaching new daily highs.

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