Like the European Central Bank, the Bank of England is expected to leave interest rates unchanged. Typically they do not release a statement when rates are not altered, but last month they took the unusual step of doing so.
Aside from that time, a statement was only released on two other occasions since the BoE became independent 10 years ago. This was in 1999 and 1998 and on both occasions, interest rates were cut the following month. Therefore even though no one is talking about it, there is a strong chance that the BoE could surprise with an interest rate cut. Even if they don?t, they may release another statement because not doing so would risk sending a hawkish message to the market. As recently as yesterday, the BoE has taken measures to increase its flexibility in the transactions that it conducts with commercial banks which is a signal that credit conditions remains a concern for the central bank.
[B]Written by Kathy Lien, Chief Currency Startegist for DailyFX.com[/B]