Traders Turn to Market Analysis in Wake of Second Quantitative Easing Announcement

LONDON, October 7, 2011 /PRNewswire/ --

On 6^th October the Bank of England announced a second phase of quantitative easing. So what does the new phase mean for traders?

Speaking on the day of the announcement, Joshua Raymond, Chief Market Strategist of spread betting provider City Index (http://www.cityindex.co.uk/), stated: "[The introduction of the second phase of quantitative easing] is an aggressive move by the Bank of England, which has clearly taken a more proactive step to curtail the UK from potentially slipping into a double dip recession. The UK Central Bank has often been criticised for being too reactive and not proactive enough and certainly this move - to effectively announce QE2 at a time much earlier than many had expected - flies in the face of that criticism."

Starting QE2 typically creates upward pressure on inflation and so the move is a risky one, said Raymond. "Though certainly with the MPC expecting inflation to hit 5%, but then falling back below the 2% target in the medium term, this forecast has certainly freed their hands somewhat."

"The impact of today's measures saw an immediate fall in value of the pound against a basket of currencies. The pound fell 1% against the US dollar on the back of the announcement before recovering some of its losses into the evening."

City Index provides a daily market commentary and the latest financial news on its website to keep traders in the loop with market-moving events. To see the latest updates from the company's trading floor, visit:

http://www.cityindex.co.uk/market-analysis/

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About City Index:

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As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined margined foreign exchange, CFD trading and, in the UK, financial spread betting.

We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, mobile trading platforms, competitive spreads, and a high standard of customer service and support. Visit http://www.cityindex.co.uk/ for more information.