Bank Of England Holds Key Interest Rate At 0.25%, As Expected

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, and its corporate-bond purchase program at �10 billion. All nine members of the rate-setting board voted to stand pat on policy. The pound fell to $1.2588 from around $1.2662 just before the decision was released. The bank in its Quarterly Inflation Report said pound weakness will cause inflation to overshoot its 2% target over next few years. Economic growth forecasts were upgraded for 2017 and 2018. On the outlook for interest rates, the bank was seen as taking a neutral stance. "For instance, if spending growth slows more abruptly than expected, there is scope for monetary policy to be loosened. If, on the other hand, pay growth picks up by more than anticipated, monetary policy may need to be tightened to a greater degree than the gently rising path implied by market yields," according to minutes from the meeting.