What's going on?

The Bank of England came out with some statements on Thursday suggesting that they wouldn�t be raising UK interest rates anytime soon.

What does this mean?

Analysts were a little surprised by the comments because the UK economy has been doing reasonably well lately. Similar to the US (see this previous story�for more info), it hasn�t been �on fire,� but it�s been chugging along at a decent pace. However, the Bank said that low prices in other countries has put pressure on prices in the UK, thus keeping �inflation� low. One of the Bank�s aims is to keep inflation from moving too high, so this �imported� low inflation allows the Bank to not raise rates.

Why should I care?

1. The bigger picture: It�s another central bank keeping rates low. The past month has seen dovish comments/actions from the Europeans, Japanese, Chinese and now the English. But comments from US Fed�officials this week suggest that they are likely to raise rates at their December meeting. Such an action would likely send the dollar higher against other currencies and create more of headwind for the US economy.
2. For the UK: The UK currency went down in value. Low interest rates tend to keep a currency from moving higher versus other currencies. The Bank, perhaps, doesn�t want the pound (the UK�s currency) to move too much higher against the other major currencies (especially the neighbouring Euro, which�the UK trades with a lot). This is an example of why some commentators claim there is a �currency war� going on.