Bank Of England provide further stimulus
The Bank of England ramped up its quantitative easing programme by £100bn it announced yesterday, taking the programme’s total to £745bn.
The increase was in line with what the market expected and therefore did not provide any shocks to the Sterling exchange rate. Expectations were however heightened as further action will be announced by the BoE over the coming months, and this should keep the pound under pressure.
The BoE voted unanimously to hold interest rates at 0.1%, highlighting the little appetite currently amongst the Monetary Policy Committee to cut rates to 0% and below, which for now gives a level of support to Sterling.
The single currency remains supported despite concerns growing for the Eurozone’s economic recovery. Comments from ECB president Lagarde pointing towards the bloc following the most pessimistic forecasts especially after the latest inflation data hitting a four year low.
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