Market Overview

Bank Of England Maintains Current Interest Rates But Hints Of Another Rate Cut This Year

Bank Of England Maintains Current Interest Rates But Hints Of Another Rate Cut This Year

The Bank of England on Thursday voted to maintain its 0.25 percent interest rate but hinted a further cut could occur before the end of the year.

The Bank of England lowered its key interest rate on August 4 to 0.25 percent from 0.50 percent. The central bank noted at that time that economic indicators "have all fallen sharply" and a similar sentiment was reiterated following its September meeting on Thursday.

According to Bloomberg, although central bank members noted that recent economic data has surprised "slightly to the upside," their longer-term view of the "contours of the economic outlook" hasn't changed.

Related Link: GBP/USD Little Changed, Focus On BOE

Policy members also suggested that if the outlook in November remains "broadly consistent" with last month when it introduced a new stimulus package, then a "further cut in bank rate to its effective lower bound" is likely.

The central bank could slash its rate to close to, but just above zero.

The next scheduled announcement on interest rates is set for November 3, and the central bank will also release at that time an updated forecast for inflation and growth.

The British pound shed around 0.20 percent following the bank's meeting and was trading at $1.3194 — roughly $0.04 higher than the post-Brexit low of $1.2798.

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