Based on today's meeting of the Central Bank of England (BoE), the BOE decided to keep interest rates unchanged in the first meeting in 2021.
Although the decision was indeed expected, the pound trade still made a profit, especially the Monetary Policy Committee (MPC) chose not to extend its bond purchase program.
The BoE Monetary Policy Committee (MPC) unanimously maintained a low rate of 0.1% and a £ 895 billion purchase program. The result prompted the sterling currency to soar above the $ 1.36 exchange rate after declining in the opening of European trade due to the possible introduction of negative interest rates.
In a statement, the BOE also stated that they expect the UK economy to grow faster to the level of figures reached before the pandemic, which will be largely driven by vaccination in the UK.
However, policymakers emphasize that the matter depends on the measures taken to protect health and how economic players respond to those measures.
At the last meeting, the Governor of the Bank, Andrew Bailey had stated the possibility of a negative rate so that the market was hesitant about the direction of the BOE. With this decision, market players can to some extent breathe a sigh of relief.
