FX News: BoE Keeps Rate Steady

FX NEWS – The Bank of England decided to keep rates steady in its monetary policy meeting. Brexit concerns continue to bug the world’s fifth-biggest economy, the bank said.

The pound barely moved after the news, trading around $1.2467. The policymakers echoed their previous statements that a no-deal Brexit would raise prices and slow down growth.

On top of that, the BoE also said that another delay to Britain’s exit could result to even weaker economy.

According to the bank, the uncertainties could mean below-potential demand growth. That, in turn, could lead to excess supply.

Prime Minister Boris Johnson pledged to take the UK out of the EU by October 31 “come what may.” Critics said this increased the likelihood of a chaotic no-deal Brexit.

With a no-deal Brexit, businesses will have no wiggle room to adjust to life outside the EU. No transition period means bad news for these businesses.

Economic Figures in FX News

The bank’s decision made headlines on fx news. It came after the Office for National Statistics released data on UK inflation.

The data showed that inflation slipped to its lowest level in three years. Annual rate dropped to 1.7% in August, coming after an increase of 2.1% in July.

This is the weakest inflation level since December 2016. The target rate for inflation is 2%. This solidified that market’s belief that the bank would not move rates in September.

Other central banks around the world also made headlines with their monetary policy decisions.

The US Federal Reserve cut rates this week to a target range of 1.75% to 2%. However, it did not provide any sign of further cuts in the coming months.

The Bank of Japan held rates steady, too, though it said it could cut borrowing costs, probably next month.

In the previous week, the European Central Bank slashed key rates by 10 basis points to negative 0.5%. This fell in line with market expectations.