British pound on the front foot as spectre of further QE recedes (BUT it has not disappeared)

 The Bank of England has once again opted to keep interest rates on hold at 0.5 pct and keep the Asset Purchase (quantitative easing) facility on hold at 375 BN GBP.

"Whilst King remains as one of three policy makers who argue that an extra  25 billion pounds of bond purchases are required to boost Britain’s sluggish economy, he look set to remain in the minority on the nine-member MPC. Most seem to feel that signs of recovery in the economy means there is no need for extra stimulus now," says Max Cohen at Spreadex.

There was no reaction from the British pound sterling (Currency:GBP) to the non-event; a look at the spot rates shows the British pound is looking comfortable:

The GBP-EUR is flat at 1.1763.
The GBP-USD is 0.33 pct higher at 1.5458.
The GBP-AUD is 0.7 pct higher at 1.6262.
The GBP-CAD is 0.17 pct higher at 1.5968.

Note that the above quotes are spot references - be advised that your bank will affix a discretionary spread. Also note that an independent currency provider will guarantee to beat your bank's offer, thus delivering you more currency. More info here).

So can the British pound now look towards a QE-free future with optimism?

Things are certainly looking brighter, but one analyst says the treat has not faded entirely.

Steve Wilkie, managing director of equity release specialist Responsible Equity Release, says:

"As Sir Mervyn King rides off into the sunset he shouldn't take personally this final snub from the grandees of the MPC.

"His calls for further QE have once again fallen on deaf ears. But with good reason - this week's flurry of encouraging economic news meant the money presses were always likely to gather dust for a while longer.

"But the spectre of further QE has only receded, not disappeared. Britain's economy might have clicked back into gear, but the lingering problems of the eurozone will continue to haunt the UK's progress.

"Domestic demand is still weak and there is every chance that the Bank's hawkish new Governor will continue to push for further monetary stimulus."

Will July see a shake-up at the Bank of England and of the British pound?

The June meeting was a bore, but central bank watchers will perk up ahead of July's meeting when a new boss arrives at the Bank.

But, Ross Walker at RBS says the ascendence of Mark Carney to the top job will not necessarily see any changes at the Bank of England:  

Mark Carney's term as Governor begins on 1 July. As such, the 4 July meeting feels far too soon for any policy changes or even announcements, especially as the BoE's formal response to the Treasury's review of monetary policy (in particular to the use of 'intermediate thresholds') is due in early August (coinciding with the Inflation Report on 7 August).

"If the recent PMI data prove vaguely accurate in terms of the Q2 GDP outturn (the survey evidence alongside generally favourable base effects are indicative of an acceleration in economic growth to 0.4% q/q, with upside risks), then even the 1 August MPC meeting feels too early for any significant steps towards greater 'monetary activism' or dovish policy signalling (the preliminary Q2 GDP data will be released on 25 July, just a week before the August MPC meeting).

"The RBS forecast remains for an unchanged Bank Rate at 0.5% and an unchanged asset purchase total at 375bn throughout 2013."