Sterling Steady on BoE Decision
July 10, 2008
As expected, the Bank of England voted to keep interest rates on hold at 5.00% in July, as it attempts to battle the duel pressures of soaring inflation and slowing economic growth. These conflicting risks look finely balanced, with developments over the past month compounding the difficult policy judgement as economic activity slowed and price pressures remain elevated. As always, the market will now look to the release of the minutes from today’s meeting in two weeks time to gauge how serious policymakers regard recent inflationary pressures and whether or not there is scope for monetary easing in the coming months. As Bank of England’s decision came of little surprise the Pound’s reaction remained largely muted to the release.