HomeLive CommentsBoE stands pat on unanimous votes, little reaction in Sterling

BoE stands pat on unanimous votes, little reaction in Sterling

BoE left Bank Rate unchanged at 0.75% as widely expected. Asset purchase target was also kept at GBP 435B. Both decisions were made by unanimous vote. BoE noted in the statement that “global trade tensions have intensified and global activity has remained soft.” That led to “substantial decline” in forecast interest rates in advanced economies and “material loosening in financial conditions”, including the UK. Also, an “increased perceived likelihood” of no-deal Brexit further lowered UK interest rate and led to Sterling’s “marked depreciation.

BoE also maintained that “assuming a smooth Brexit and some recovery in global growth, a significant margin of excess demand is likely to build in the medium term.”
And “were that to occur, the Committee judges that increases in interest rates, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target.”

Full statement here.

Sterling is steady after the release, having effectively no reaction. GBP/JPY is staying in consolidation from 131.61 temporary low. Such consolidation is expected to be relatively briefly and larger decline should resume sooner rather than later.

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