The Bank of England voted to keep rates on hold last night at 0.5% keeping in line with all analysts polled. What was more troubling was the speech delivered by Mark Carney the head of the BOE straight after the decision to keep rates stable .Analysts are now moving out their expectations for any lift in the official cash rate to the second half of 2015.
The mess that is the Euro Zone has been weighing heavily on the UK economy as it is the UKs largest trading partner. Mario Draghi was quoted as saying as he also kept rates on hold at 0.05% that ‘’the relevant Euro System committees with ensuring the timely preparation of further measures to be implemented if needed. In layman’s terms he would open the money spigots if that is what it takes to revive an economy that is going through its third recession.
There have been some positives signs to the British economy but it has not been filtering down to the man on the street .One of the reasons given for keeping rates on hold by Mark Carney was the consistent pressure on wages growth and inflation. The BOE also signalled it was happy to maintain its stimulus program or QE for short.
The Australian Dollar (AUDGBP) rallied almost immediately putting on nearly 1% against both the Pound and also the Euro. Closer to home Australian Unemployment came in as expected remaining steady at 6.2% .What was surprising was the 24.1 thousand jobs added, with the majority of those being fulltime jobs.
ANZ was quoted as saying ‘’the latest numbers suggested a moderate improvement in the labour market ‘’but it did cast doubt on the veracity of the data. This result is the highest jobless rate seen since 2003. The Australian Dollar which has seen some significant selling pressure over the last few days recovered slightly before succumbing again to close underneath major support at 0.85994.