The Bank of England has left interest rates unchanged at a 48-year low of 3.5pc following a meeting today. The decision was widely expected. Last month, the nine-member committee also held rates at 3.5pc, voting unanimously in favour of no change. The monetary policy committee last cut rates in July, when it lowered borrowing costs by 25 basis points saying that export growth could ease due to sluggish demand in the eurozone.
According to Niall Dunne, of Ulster Bank Financial Markets, last week's revision to UK Q2 GDP did cause some surprises when it doubled from 0.3pc to 0.6pc and had many calling for a rate hike, but Tuesday's much weaker than expected industrial production data ruled out the chances of a rate hike. "The FX market obviously thinks that rates will be left on hold, because sterling has continued to weaken, although this is nothing more than a factor of the dollar's fall," he said. The rate hold has had almost no immediate effect on the market as almost all players had priced it in. At 1200, sterling was down just a touch on the dollar at USD1.6626. //www.fxcentre.com