British Pound Holds Above 1.95 as Bank of England Leaves Rates at 5.00%

British Pound Holds Above 1.95 as Bank of England Leaves Rates at 5.00%

The British pound managed to hold above the 1.95 level aganist the US Dollar on Thursday as the Bank of England left rates steady at 5.00 percent. The move was in line with expectations, but given the continued deterioration in UK economic data, there had been some speculation that the Monetary Policy Committee would vote in favour of a 25bp cut. Nevertheless, the BOE tends to take a slow-and-steady approach when it comes to changing monetary policy, and given the upside risks to inflation looming from booming commodity prices, it is not entirely surprising to see that they left rates unchanged. However, when the minutes from the meeting are released on May 21, the news could be bearish for the British pound as there were likely at least one or two votes for a rate cut and widespread concerns regarding downside risks to growth.