Bank Of England Holds Key Rate At 0.25%, With 3 Policy Makers Voting For a Hike

By Carla Mozee Markets MarketWatch Pulse

The Bank of England on Thursday left its key interest rate at 0.25%, meeting expectations. But the vote to hold the rate steady was 5-3, with more policy makers than anticipated looking for a rate increase. The pound surged to $1.2781 from $1.2702 just ahead of the decision, on the 5-3 vote tally. Analysts were widely expecting only one BOE member to vote in favor of a rate hike, in line with the voting at the May meeting. Economic data this week have shown inflation rising to nearly 3%, average wages falling and retail sales declining. The central bank on Thursday also left unchanged the size of its asset purchase program at �435 billion ($554 billion) and its corporate-bond purchase program at �10 billion. The BOE's decision was the first since the U.K.'s general election resulted in a hung parliament.

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