Breaking: BoE leaves policy rate and QE unchanged, GBP/USD recovers modestly


The Bank of England's (BoE) Monetary Policy Committee (MPC) decided to leave the benchmark interest rate unchanged at 0.10% at its January policy meeting and kept the Asset Purchase Facility steady at £895 billion.

Follow our live coverage of the BoE policy announcements and the market reaction.

Market reaction

With the initial market reaction, the GBP/USD pair erased a portion of its daily losses and was last seen losing 0.3% on a daily basis at 1.3605.

Key takeaways from policy statement as summarized by Reuters

"UK GDP is expected to have risen a little in 2020 Q4 to a level around 8% lower than in 2019 Q4."

"GDP in Q4 materially stronger than expected."

"Impact of COVID measures is not expected to be as severe as in 2020 Q2."

"GDP is expected to fall by around 4% in 2021 q1, in contrast to expectations of a rise in the November report."

"Labour market indicators remain difficult to interpret."

Other indicators suggest that labour market slack has remained higher than implied by LFS rate."

"The government's employment support schemes are likely to limit significantly the immediate rise in unemployment."

"There has been relatively little reaction in markets to a trade deal between the EU and the UK which was largely in line with market expectations."

"When covid restrictions are eased, the combined effects of higher demand and lower uncertainty about the UK and the EU's trading relationship would positively affect businesses making hiring and investment decisions."

"Risks around economic activity from pandemic developments were, on balance, tilted to the downside, although less so than in the November report."

"Risk management considerations had implied that policy should lean strongly against downside risks to the outlook."

"If the outlook for inflation weakened, the committee stood ready to take whatever additional action was necessary to achieve its remit."

"Committee did not intend to tighten monetary policy at least until there was clear evidence that significant progress was being made in eliminating spare capacity and achieving the 2% inflation target sustainably."

"Committee continued to envisage that the pace of gilt purchases could remain at around its current level initially, with the flexibility to slow the pace of purchases later."

"Scope for the Bank of England to re-evaluate the existing technical parameters of the gilt purchase programme."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Are you new to trading or have been trading for a while and you feel stuck?

Try with us!
Become Premium!
   

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD struggles above 1.2050 inside rising wedge

EUR/USD is holding steady below 1.2100, wavering inside a bearish chart pattern. MACD also teases sellers but key EMAs add to downside filters. Bulls have a bumpy road to recovery, 1.2200 becomes crucial resistance.

EUR/USD News

GBP/USD: Bulls lookig for breakout to the topside

Following the progression of the price action and market structures across the various time frames in GBP/USD, it can be concluded that the bulls are now in the most favorable position. The daily chart offers compelling upside bias as bears start to run out of juice.

GBP/USD News

Dogecoin price spikes on Musk tweet, renews momentum for DOGE to test $1

Dogecoin price closed below the critical April high yesterday, putting the pursuit of $1.00 in doubt. The new Elon Musk tweet has reversed the descent and raises the potential of DOGE closing today with a bullish engulfing day.

Read more

EUR/USD struggles above 1.2050 inside rising wedge

EUR/USD is holding steady below 1.2100, wavering inside a bearish chart pattern. MACD also teases sellers but key EMAs add to downside filters. Bulls have a bumpy road to recovery, 1.2200 becomes crucial resistance.

EUR/USD News

Why US retail sales will rock the markets on Friday

It was a rollercoaster ride in the financial markets this week and volatility is not expected to subside tomorrow with the April US retail sales report scheduled for release. investors are eager to see how well the consumer is holding up.

Read more

Forex MAJORS

Cryptocurrencies

Signatures