Bank of England holds fire before key inflation report

A city worker walks past the Bank of England in central London.
Geoff Caddick | AFP | Getty Images
A city worker walks past the Bank of England in central London.

The Bank of England (BoE) opted to maintain its main interest rate at 0.5 percent on Thursday and keep its asset purchase program on hold, but did not issue a statement about future policy following the decision.

Sterling rose to $1.5235 from $1.5181 before the announcement, which was in line with market expectations in a Reuters poll. Only one investment bank - Investec – expected the BoE to add to its £375 billion ($574 billion) quantitative easing (QE) program.

Yields on the benchmark 10-year gilt moved slightly lower to 2.323 percent.

(Read more: Expect 'radical changes' from the Bank of England)

This outcome matches that of last month's meeting, which was the first in the tenure of new BoE governor Mark Carney. He surprised markets by releasing a statement about future policy following the July meeting, and minutes released later revealed that the Monetary Policy Committee (MPC) had voted unanimously against further money stimulus, following months of disagreement over the issue.

No statement was issued by the BoE on Thursday, however, but it said it would release its review into forward guidance with the inflation report next week.

Robert Wood, chief U.K. economist at Berenberg Bank, told CNBC he was surprised there was no statement from Threadneedle Street. "Well we're waiting for next week," he said. "I thought there would be a statement, but obviously not."

Kathleen Brooks, research director at, said the lack of statement did not mean that the BoE wouldn't release statements going forward.

"It may not do so in the same month as an inflation report is released, so we still expect some changes to the BoE's communications strategy in the coming months," she said in a note.

(Read more: Bank of England unites against QE under Carney)

Bank of America Merrill Lynch indicated earlier in the week that the U.K. will effectively be in "limbo" until the inflation report is released on Wednesday, while Societe Generale said it expects the BoE to "wake up" and make "radical changes". The French bank said "monetary activism" was likely be put in place next week, in the form of forward guidance, with a threshold linked to unemployment, like that currently used by the U.S. Federal Reserve.

(Read more: 'Big challenge' looms for Bank of England: PwC)

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