The UK pound rallied broadly this afternoon to a high of $1.6051 after the Bank of England announced their decision to keep policy unchanged, reversing losses made earlier in the day.
 
Britain's central bank left interest rates unchanged at a record low of 0.5%, in line with market expectations, however left open the option of restarting its quantitative easing programme should the economy weaken further. In spite of a recent raft of poor economic data that points towards a growing risk of another recession, many believe, including MPC member Martin Weale, that data had not yet reached the point where additional stimulus is necessary. Minutes from today’s meeting are due for release on 20 September, which may show that policymakers discussed options for injecting further stimulus into the economy.

This afternoon, US weekly job data showed a higher-than-expected rise in initial jobless claims. The data has added to the pressure on president Barack Obama, who will present a jobs plan which he hopes would revive the US economy. Federal Reserve chairman Ben Bernanke will also give a speech at 6.30pm (London time), however markets do not anticipate that he will announce new measures to boost the US economy.