LONDON: Sterling rose and UK gilts pared gains on Thursday after the Bank of England (BoE) said it would inject 50 billion pounds of monetary stimulus to support the UK economy.
Analysts polled by Reuters had expected a 50 billion pound cash boost, or quantitative easing, from the central bank . However, some traders had speculated it might opt for a 75 billion pound injection, and possibly a cut in the bank rate.
Sterling rose to $1.5601 from $1.5570 before the BoE announcement, but remained well below this week's high of $1.5723. The euro was at 80.20 pence, compared with 80.36 pence before the move.
September gilt futures pared gains by more than 30 ticks to hit a session low of 119.19 after the decision. The yield on ten-year gilts rose by 4 basis points to stand at 1.712, down 1 basis point on the day.
Currency, bond, and stock markets also moved because of an unexpected Chinese rate cut that was announced around the same time as the BoE move.
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