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October 2015

Bank of England leave interest rates on hold

Published: Thursday 08 October 2015

The Bank of England minutes earlier today turned out to be another non-event. Interest rates have been left unchanged at 0.5% along with their asset purchase program also unchanged at 375B GBP. The MPC members voted 8-1 against a rate hike with Ian McCafferty maintain his view of an interest rate hike. This was due to the persistent inflation weakness. They also noted that the economy has started to lose momentum after 10 consecutive quarters of expansion.
Still to come tonight are the FOMC minutes. The market will be closely watched for an indication as to when the Fed will raise interest rates. The market is still pointing to a 39% chance of an interest rate hike in December. We had strong unemployment claims figures which declined to its lowest level since mid-July and also to a near 42 year low. We could still see optimism about a rate hike and the USD could gain if the minutes give a vote of confidence to the U.S. economy.