Bank Of England Holds Key Interest Rate At 0.5%, Sees Brexit Risks

By Markets MarketWatch Pulse

The Bank of England on Thursday kept its key interest rate at a record low of 0.5% and made no changes to its 375-billion-pound ($540.06 billion) asset purchase program. The vote was unanimous. Policy makers weren't expected to make policy changes before a June 23 referendum in the U.K. on whether the country should stay or exit the European Union. "The most significant risks to the [bank's] forecast concern the referendum. A vote to leave the EU could materially alter the outlook for output and inflation, and therefore the appropriate setting of monetary policy," the BOE said in a statement. Polls indicate the result of the so-called Brexit referendum will be tight. The pound traded at $1.4479, compared with $1.4447 before the policy decision was announced.

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