Bank shocks markets with QE extension

Sterling tumbled and yields on gilts fell on Thursday after the Bank of England surprised markets by opting to extend its quantitative easing programme by £50 billion ($84.4 billion).

The pound fell 0.7% against the dollar to 59.28p and 0.5% against the euro to 85.3p on the back of news the Bank would increase the size of its quantitative easing programme to £175 billion. The yield on the benchmark ten-year government bond fell 15 basis points to 3.67%.

Analysts had largely expected the Bank to

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