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Stocks rally, pound drops as Bank of England backs stimulus

New measures include a new quantitative easing programme which involves buying up to £10 billion of corporate bonds and buying an extra £60 billlion of United Kingdom government bonds, taking its total asset purchases to £435 billion, using the central bank's reserves.

"While the forward guidance of more easing was quite explicit yesterday, it really only amounts to a signal of a further 15 basis points of easing down to 0.10 percent", said Derek Halpenny, European head of global market research at bank of Tokyo-Mitsubishi UFJ in London.

US stocks are mostly higher Thursday as the market continues the small moves it's made in the last few weeks.

The Bank of England is trying to counter the shock of Britain's vote to leave the European Union in late June.

The Bank cut official interest rates to a new record low of 0.25% from 0.5% and signalled they would be reduced further in coming months.

These efforts have been criticised in some quarters, including from a former colleague on the Bank's interest rate-setting Monetary Policy Committee.

The British pound crawled up 0.2% to $1.3130 after retreating 1.7% overnight.

Growth this year was forecast at 2%, unchanged from May's outlook after a much stronger than expected second-quarter growth figure made up for a slowdown after the European Union referendum.

The Dow Jones industrial average fell 2.95 points, or 0.02 per cent, to 18,352.05, the S&P 500 gained 0.46 points, or 0.02 per cent, to 2,164.25 and the Nasdaq Composite added 6.51 points, or 0.13 per cent, to 5,166.25.

North American stock markets remained, to some extent, in "somewhat of a summer doldrums state right now", Smith said, and showed little movement from Wednesday's close.




USA crude CLc1 was down 0.4 percent at $41.75 a barrel after surging 2.7 percent overnight.

A new scheme to provide £100bn ($131 billion) of new funding to banks for passing down the base rate cut to the real economy.

"At its meeting ... the MPC voted for a package of measures created to provide additional support to growth and to achieve a sustainable return of inflation to the (2.0-percent) target", the bank said. While the pace of hiring and economic growth slowed in the first half of the year, consumers may boost spending in the months to come.

CURRENCIES: The pound fell 1.5 percent to $1.3132 by early afternoon in London. Its stock gave up $2.08, or 14 percent, to $12.76.

Markets appeared to be surprised by the scale of the stimulus package unveiled Thursday - the pound dropped 1.4% to $1.31, while the FTSE 100 index of leading stocks gained 1.5%.

Japan's Nikkei advanced 0.3%, on track for a loss of 1.6% for the week.

OIL: Benchmark U.S. crude lost 14 cents to $40.69 per barrel in NY.

The dollar was effectively flat at 101.185 yen, on track to fall 0.8 percent on the week.

The dollar index was steady at 95.752 after gaining 0.3 percent on Thursday.

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