(eToro Blog) Earlier, the Bank of England announced that it would leave its key lending rate unchanged at 0.5%, as economists had widely predicted. The press release also noted that the Bank’s asset purchasing program would be maintained at £275 billion, also as expected by analysts. Minutes of the meeting will be published on January 25th.
It was clear after the least MPC meeting that the U.K.’s central bank wanted to take a wait-and-see stance before deciding on additional easing, but the economic data over the period since then has not improved to any great extent, and many wonder how much worse it has to get before the Bank jumps into action.
In support of that argument, earlier today the Office of National Statistics released production data for the U.K.’s industrial and manufacturing sectors. In November, on an annualized basis, industrial production fell to -3.1% from a downwardly revised -2.1%, even as the consensus called for -2.2%. On a month-to-month basis, industrial production slipped to -0.6% from -1.0% which was revised downward from 0.7%; analysts expected -0.1%. Manufacturing production also declined on annualized basis, slipping to -0.6% from a revised 0.1%, slightly off the expected -0.5%. On a month-to-month basis, manufacturing production improved to -0.2% in November from -0.9% in October, in line with expectations.
Ahead of the Bank of England decision the GBP/USD was trading higher at 1.5337; OpenBook sentiment, however, remains primarily bearish. Sterling trader Santosh is more optimistic, and opened a long position in the pair yesterday, and is targeting 1.5792.
Copyright 2012 eToro Blog
