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No change from BoE or ECB

No change from BoE or ECB
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The Bank of England’s new governor Mark Carney has chaired his first policy meeting, apparently in a wait-and-see mood.

No new moves were announced to boost the UK economy. The main interest rate stayed at 0.5 percent and stimulus through asset purchases – quantitative easing – will continue unchanged.

But the policymakers did complain about an “unwarranted” rise in the amount of interest having to be offered to sell government bonds and fretted about the effect that will have on Britain’s growth.

Sterling fell to a one-month low against the dollar and British government bond yields fell sharply.

Shares on London FTSE100 rose, led by cyclical banking, oil and mining stocks, after the Bank of England indicated that there were no near-term prospects for monetary policy tightening.

The European Central Bank also left rates unchanged at 0.5 percent during its monthly policy meeting, seeing tentative signs of an economic recovery in the eurozone, but amid new turmoil in eurozone bond markets.

The political crisis in Portugal has pushed up interest rates on its government bonds to unsustainable levels as investors worry over
Lisbon’s ability to end its international bail out.

The tensions there, and in Greece, risk sapping confidence a year after ECB President Mario Draghi imposed some calm by vowing to do “whatever it takes” to save the euro.

For now Portugal’s problems have not splashed over too much on to Italy and Spain. They are insulated by demand from domestic investors and the European Central Bank’s bond-buying promises.