Bank Of England Holds Key Rate At 0.25% At Last Meeting Of 2016

By Carla Mozee Markets MarketWatch Pulse

The Bank of England on Thursday left its key interest rate at a record low 0.25%, meeting widely held expectations. The central bank also left unchanged the size of its asset purchase program at �435 billion ($543 billion) and its corporate-bond purchase program at �10 billion. All nine members of the rate-setting board voted to stand pat on policy. This week, Britain's consumer-price index leapt above 1% for the first time since October 2014. "Sterling's effect on CPI inflation will ultimately prove temporary and fully offsetting it would require exerting further downward pressure on domestic costs, including wages, and would therefore involve lost output and higher unemployment," the BOE said in a statement. The pound fell to $1.2459 from $1.2483 just before the BOE's policy decision was released. The pound has been under pressure Thursday, with the U.S. dollar rising after the Federal Reserve [l: on Wednesday raised interest rates and signaled it will continue raising rates in 2017.

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