Sterling levels as Bank signals pause in QE

Sterling levelled out against the dollar as the Bank of England signalled a halt to quantitative easing (QE).

As expected, the Bank announced today (February 4th) that it was pausing quantitative easing.

The lending rate has been maintained at 0.5 per cent and the asset purchase programme also rests at £200 billion.

Sterling has been falling steadily against the dollar, due to the uncertainty of the British economy.

But this news from the Bank could allow the currency a chance to recuperate some of its losses, as it reinforces signs that Britain is leaving the recession.

However, the markets have remained hesitant for now.

Geoffrey Yu, currency strategist at UBS, told Reuters: "The market may have been anticipating some degree of further easing, especially in light of disappointing growth figures."

Sterling has been falling steadily against the dollar since mid-January, but today saw a steadier rate with one pound buying 1.585 dollars at 12:00GMT today.

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Posted by Thomas Smith