Bank Of England Lifts GDP Forecast After Keeping Rates On Hold

By Markets MarketWatch Pulse

The Bank of England on Thursday kept interest rates on hold and signaled there would be no further easing in 2016, citing stronger-than-expected economic data. The central bank's policy makers voted unanimously to maintain the benchmark rate at a record low of 0.25% and keep its quantitative easing program at �435 billion ($542.96 billion). The bank also said it'll keep its corporate bond purchases at �10 billion. "Indicators of activity and business sentiment have recovered from their lows immediately following the referendum and the preliminary estimate of GDP growth in Q3 was above expectations," the bank said. "These data suggest that the near-term outlook for activity is stronger than expected three months ago." In its quarterly inflation report, the BOE lifted its inflation outlook for 2017 to 2.7% from 2% forecast in the August inflation report. It also raised its 2017 economic growth outlook to 1.4% from 0.8%. The pound rallied after the reports, buying $1.2492, compared with $1.2302 late Wednesday in New York. The FTSE 100 index , however, slumped 0.7% to 6,796.22, weighed by the pound rally.

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