GDP surprise keeps MPC on hold for now

first_img whatsapp whatsapp Show Comments ▼ THE Bank of England yesterday voted to hold fire on further quantitative easing (QE) and kept interest rates on hold at 0.5 per cent, in a move that was widely expected following the strong GDP data released last week.Prior to the publication of third-quarter GDP, which showed the economy growing at twice the rate expected by City economists, many had tipped November as a likely month for the Monetary Policy Committee (MPC) to move. Since it is an Inflation Report month, the Bank benefits from fresh growth and inflation forecasts. These will be made public next Wednesday when the Bank’s Inflation Report is published.The decision not to follow in the footsteps of the Federal Reserve boosted sterling against a broadly weaker dollar, reaching an intra-day high of $1.6296.Many analysts still believe that the Bank of England will expand QE further in 2011.“A simultaneous launch of QE2 on both sides of the Atlantic wasn’t going to happen, but we still think the Bank of England will be forced into taking the plunge in 2011,” said Graeme Leach, chief economist at the Institute of Directors.ING’s James Knightley said: “The lack of credit availability, fiscal austerity and falling house prices are likely to weigh on activity and we do believe that the Bank will eventually follow the Fed down the route of additional QE.” He adds that this is most likely to happen in the second quarter with £50bn of gilt purchases spread over three months.The European Central Bank (ECB) also maintained the status quo yesterday, leaving the cost of borrowing at one per cent. In the press conference, ECB president Jean-Claude Trichet said he was confident the Federal Reserve still supports a strong dollar, after it committed to pumping more money into its economy via bond purchases. Share Tags: NULL center_img KCS-content GDP surprise keeps MPC on hold for now Thursday 4 November 2010 11:37 pm Read This NextRicky Schroder Calls Foo Fighters’ Dave Grohl ‘Ignorant Punk’ forThe WrapCNN’s Brian Stelter Draws Criticism for Asking Jen Psaki: ‘What Does theThe WrapDid Donald Trump Wear His Pants Backwards? Kriss Kross Memes Have AlreadyThe WrapHarvey Weinstein to Be Extradited to California to Face Sexual AssaultThe WrapNewsmax Rejected Matt Gaetz When Congressman ‘Reached Out’ for a JobThe WrapPink Floyd’s Roger Waters Denies Zuckerberg’s Request to Use Song in Ad:The Wrap’The View’: Meghan McCain Calls VP Kamala Harris a ‘Moron’ for BorderThe Wrap’Sex and the City’ Sequel Series at HBO Max Adds 4 More ReturningThe Wrap2 HFPA Members Resign Citing a Culture of ‘Corruption and Verbal Abuse’The Wrap Ad Unmute by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastUndoMoneyPailShe Was Famous, Now She Works In {State}MoneyPailUndoThe Sports DropForgotten College Basketball Stars: Where Are They Now?The Sports DropUndoMagellan TimesThis Is Why The Roy Rogers Museum Has Been Closed For GoodMagellan TimesUndoUpbeat NewsThese 25 Celebrities Ruined Their Career in a Matter of MinutesUpbeat NewsUndoElite HeraldExperts Discover Girl Born From Two Different SpeciesElite HeraldUndoMoney VersedWoman Shares The 5 Words She Said That Left Her Boyfriend In AweMoney VersedUndoZen HeraldThe Truth About Why ’40s Actor John Wayne Didn’t Serve In WWII Has Come To LightZen HeraldUndoMisterStoryWoman Files For Divorce After Seeing This Photo – Can You See Why?MisterStoryUndolast_img

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