Pound Jumps On Modest GBP25 Billion Asset Purchase Extension
Thu, Nov 5 2009, 12:07 GMT
http://www.djnewswires.com/eu
LONDON (Dow Jones)--The pound has jumped after the Bank of England met expectations by increasing its liquidity-boosting asset purchase scheme by GBP25 billion.
The move takes the total target for the BOE's facility to GBP200 billion. Core interest rates remain at 0.5%, as expected.
The news pushed the pound 0.6% higher against the dollar, to trade at a session high of $1.6619. The euro fell by a similar degree to hit a low of GBP0.8941.
Economists had generally expected that the asset purchase scheme would be extended, although they were divided over the scale of the BOE's likely action.
Just over half of 19 analysts surveyed by Dow Jones Newswires had predicted that the facility would be lifted by GBP50 billion, while seven correctly expected an increase of GBP25 billion. Two had predicted no change.
Relief that a bigger extension hadn't materialized appeared to be behind the boost to the currency.
-By Katie Martin, Dow Jones Newswires; +44 (0) 207 842 9346; katie.martin@dowjones.com
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(END) Dow Jones Newswires
November 05, 2009 07:07 ET (12:07 GMT)
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