10 July 2009

British Pound Up against US dollar

Today the MPC left the markets in despair as they released a rather ambiguous statement as to the future of QE.

Up until the announcement, it was expected without much concern that the MPC would say that they intend to spend more money on the QE up to the full amount of £150 billion. But yesterday, the message was that they would spend the remaining £13 billion of the current programme and then....well, they would see at the next meeting in August.

The City reacted with disappointment and mixed opinions as to what would in fact happen. Some believe that the committee will definitely continue the programme and increase asset purchasing, but others believe that this is really open.

The news caused the British Pound to rise by about 1 per cent against the US Dollar.

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