The Bank of England (BoE) left interest rates unchanged, producing the same outcome as last month. The Governor of the Bank of England was outvoted again 6-3 to keep the UK’s quantitative easing program on hold. This will be the last meeting for King, as he will be replaced by the Bank of Canada’s Carney in July.
The hawkish tone of the BoE can be backed up by recent data that has shown that the UK is on more solid footing then many of its OECD friends. For instance, the UK’s services purchasing managers index rose to 54.9 from 52.9 and was the most robust reading since March 2012. New business climbed to a 3-year high to 57.2 vs. 54.2. The UK purchasing manager’s construction index came in better than expected printing earlier this week at 50.8 reaching above the boom bust level coming all the way from 46.8 in February of 2013.
Key Levels For Pound
The UK economy is experiencing the rebound other OECD countries are yearning for without the push of a robust bond purchase program. The British pound has rebounded smartly and is now heading for resistance levels not seen since mid-April. A close above 1.56, would likely lead to a test of the 2013 highs seen near 1.62.
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