European stocks rise on BoE boost, ahead of United States data

About 60 billion pounds were pledged for the government bond purchases, along with the implementation of schemes to purchase high-grade corporate bonds, and to safeguard that banks will pass on the full rate cut to borrowers.

“By acting early and comprehensively, the (Bank) can reduce uncertainty, bolster confidence, blunt the slowdown and support the necessary adjustments in the United Kingdom economy”, Bank Governor Mark Carney told a news conference.

On the other hand, the dollar, driven to a six-week low after a poor US second-quarter gross domestic product (GDP) reading last week, drew strength from the gains against sterling.

(Updates prices, adds comments) * Dollar index steady ahead of USA payrolls data * Pound on defensive after BoE’s drastic easing * Aussie dollar firmer despite dovish RBA quarterly statement By Masayuki Kitano and Hideyuki Sano SINGAPORE/TOKYO, Aug 5 (Reuters) – The dollar held steady on Friday with its near-term fortunes riding on whether U.S.jobs data will rekindle expectations for the Federal Reserve to raise interest rates this year.

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

The dollar index inched down 0.1 percent to 95.665 after gaining 0.2 percent on Thursday.

“The economic outlook has changed markedly … and (this is) consistent with the risks which the MPC saw before the vote”.

“We’re living through a time of considerable uncertainty”. That took the total stimulus to as much as £170 billion. The measures seemed to exceed investors’ expectations, and the bank said the measures could be expanded later if it proves necessary.

Economist Andrew Sentance has said this is one case where a central bank can do little to offset the shock to the economy. The euro was steady at $1.1132 after losing 0.7 percent on Thursday.

Inflation is forecasted to increase thanks to the weakness of the pound, with the Central Bank now anticipating to hit their 2% target in Q4 of 2017 as opposed to Q2 of 2018 as previously anticipated.

Barclays, meanwhile, said that the low interest rates would be passed onto consumers, promising a mortgage rate cut of 0.25 percent.

The Bank of England said Thursday that it would cut its main interest rate to its lowest point ever and expand other measures to bolster Britain’s economy over concern that the country’s decision to leave the European Union could weigh on growth. That compared with prior predictions of 2.3 percent for both 2017 and 2018. The number of Americans collecting unemployment benefits has fallen more than 5 percent in a year ago, but the pace of hiring and economic growth slowed in the first half of 2016.

New British finance minister Philip Hammond welcomed the BoE announcement.

“It’s right that monetary policy is used to support the economy through this period of adjustment”.

The BoE had flagged last month that it would likely cut rates in August in response to the Brexit vote, which had sent markets tumbling and the pound slumping in its aftermath.