The Bank of England and European Central Bank left rates unchanged at 0.5 percent.
“In the light of the Committee’s latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that it was appropriate to maintain Bank Rate at 0.5% and its stock of purchases of government and corporate debt financed by the issuance of central bank reserves at £200 billion.”
Source: Bank of England Statement
The European Central Bank also left rates unchanged at 1.0 percent.
“To sum up, the current key ECB interest rates remain appropriate. Taking into account all the information and analyses that have become available since our meeting on 14 January 2010, price developments are expected to remain subdued over the policy-relevant horizon. The latest information has also confirmed that euro area economic activity continued to expand around the turn of the year. Looking ahead, the Governing Council expects the euro area economy to grow at a moderate pace in 2010. The recovery process is likely to be uneven and the outlook remains subject to uncertainty. A cross-check of the outcome of the economic analysis with that of the monetary analysis confirms the assessment of low inflationary pressure over the medium term. All in all, we expect price stability to be maintained over the medium term, thereby supporting the purchasing power of euro area households. Medium to longer-term inflation expectations remain firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term.”
Source: European Central Bank Statement
The two statements were similar, looking for slow growth in 2010 with inflation expectations in check. Neither statement was hawkish, and thus expectations are for rates to remain unchanged for some time. This led to the GBP and the EUR decreasing significantly against other currencies, such as the USD and JPY. EURGBP has remained sideways.
