Bank Of England Holds Key Rate At 0.5% Ahead Of Brexit Referendum

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 ($530 billion) asset-purchase program. All nine rate-setting policy makers voted to hold rate unchanged. The decision marked the last before the June 23 referendum in the U.K. on whether the country should stay or exit the European Union. "As the Committee set out last month, the most significant risks to the MPC'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. As the BOE decision was released, IG/Survation released a new poll showing 45% in favor of leaving the EU, while 42% want to stay. That adds to recent polls indicating the British public is leaning toward supporting a Brexit. The pound briefly fell below $1.41 from $1.4134 before the BOE's policy decision was announced.

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