BOE Adopts Forward Guidance, Sets Threshold

The Bank of England on Wednesday provided explicit forward guidance on the central bank’s future monetary policy, saying its key lending rate will remain at a record low of 0.5% until the U.K.’s unemployment rate drops to 7%.

Additionally, the Monetary Policy Committee “stands ready to undertake further asset purchases while the unemployment rate remains above 7% if it judges that additional monetary stimulus is warranted,” the bank said.

It also noted that it doesn’t intend to reduce its bond buying until the unemployment rate falls below the 7% threshold. The U.K.’s benchmark stock index, the FTSE 100 UK:UKX -0.94% , initially moved into positive territory, but was off 0.4% at 6,577.25 at the latest.

The pound GBPUSD +0.2365% fell to $1.5266 after trading as high at $1.5362 earlier in the day according to FactSet.

Source: Market Watch