By FXEmpire.com
In an expected move the Bank of England today, held their key lending rate at 0.5% and maintained ?their current asset program level of 325b GBP.?
In the UK, if there is no policy or rate changes the BoE does not have to make a public statement, ?therefore Governor King has avoided giving a public address and discussing the current economic ?situation.?
The GBP declined from an 8 month high against the U.S Dollar, trading back under pivotal support at ??1.6170, after a report showed that UK house prices fell in April. The RICS house prices balance showed ?that an index of prices dropped to minus 19, from -11 in March. A reading below zero means that ?surveyors saw more price declines than increases during the month.?
The Pound also declined modestly against the Euro, even amid concern that Greece will withdraw ?from the currency bloc. Greek leaders will meet in Athens, after talks yesterday failed to forge a ?governing coalition following inconclusive weekend elections. Nevertheless, the Pound remained ?above 1.24 for the majority of the day, which is the highest level in almost two years, and with the ?political and economic uncertainties even more evident in Europe, it’s an upward trend that shows few ?signs of abating.?
Financial analysts said the decision of the nine-member committee was a close call and that more QE ?by August looked inevitable if they did not vote in favor this month. 
Interest rates will be kept at a ?record low of 0.5%.?
Pressure for further stimulus measures has intensified amid the recent deepening in the eurozone ?crisis and after figures showed the UK in a technical recession, with gross domestic product declining ??0.2% in the first three months of the year after a 0.3% drop in the final quarter of 2011.?
However, minutes of the bank’s last meeting showed a reluctance to increase QE, with arch-dove ?Adam Posen dropping his call for an extra ?25bn.?
Inflation has been consistently high, rising unexpectedly in March to 3.5%, despite governor Sir ?Mervyn King and his colleagues predicting that the Consumer Price Index (CPI) would fall to the ?government’s 2% target by the end of the year.?
The accuracy of official data has been called into question after a run of purchasing managers’ surveys ?in the first three months of the year revealed decent growth in the manufacturing, construction and ?services sectors.?
Expect the MPC to hold off from more QE due to its current heightened inflation concerns and a belief ?that the economy is seeing underlying modest growth despite the reported first-quarter GDP ?contraction that put the economy officially back into recession.?
The sterling reacted favorably to the news, moving back up to trade at 1.6173 looking perched to pass ?the 1.62 price level shortly.?
Click here for updated EUR/GBP News.
Originally posted here
