Bank of England holds key rate at 0.75pc

LONDON (AP) — Bank of England said it has decided to hold its key interest rate at 0.75 per cent, as markets widely expected.

The decision was announced yesterday after a regular monetary policy meeting.

United Kingdom (UK) authorities began investigating yesterday into how some hedge funds had access to market-sensitive news conferences of the Bank of England via an audio system a few seconds earlier than anyone else, an advantage they could have used to make big profits.

Following a report late on Wednesday from The Times newspaper, the Bank of England said an investigation was underway into what it termed the “wholly unacceptable use of the audio feed”.

The bank referred the case to the financial regulator, the Financial Conduct Authority, which is also looking at the incident amid concerns of insider trading.

According to The Times, market participants who subscribed to a market news service offering an audio feed of the Bank of England Governor Mark Carney’s quarterly press conferences had a five- to eight-second head start over competitors. That means anyone with access to the audio feed could have had an advantage over those who were watching via the official broadcast provided by Bloomberg News.

Having access to comments from Carney seconds before the official broadcast feed is seen by other investors could give a big advantage to traders who use powerful computer programmes.

So-called high-frequency trading can execute a huge number of transactions in a fraction of a second, meaning that early access to market-moving news can yield big rewards.