- Michael Hewson, senior market analyst at CMC Markets
Just like their European colleagues, the BoE policymakers decided to leave the benchmark interest rate untouched. However, unlike the ECB, debate over interest rate hike is heating up among the Monetary Policy Committee members. Central bankers also agreed to keep the overall volume of its asset purchases at 375 billion pounds. Britain's strengthening economy, which grew an annualized 3.2% in the second quarter, means the BoE is on course to be the first of the world's major central banks to lift interest rates from historic lows. Investors expect officials to begin raising the benchmark rate either at the end of 2014 or early next year. Sustained growth caused unemployment rate falling; nevertheless, policy makers have stressed they are intended to keep rates on hold until there is evidence Britain's economy is reaching full strength and inflationary pressures are increasing, with annual inflation being slightly below the BoE's 2% goal at 1.9% in June. While the International monetary Fund foresees the U.K. to be the fastest-growing developed economy this year, the Bank of England will release its updated economic forecast next week.
The Sterling was unchanged versus the U.S Dollar, trading around its previous close at $1.6847, as the outcome was in line with market expectations.
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