BoE left Bank Rate unchanged at 0.75% on 7-2 vote. Jonathan Haskel and Michael Saunders voted for a 25bps cut, for the third straight meeting. Asset purchase target is held at GBP 435B on unanimous vote.
In the accompanying statement, the central bank noted that “policy may need to reinforce the expected recovery in UK GDP growth should the more positive signals from recent indicators of global and domestic activity not be sustained or should indicators of domestic prices remain relatively weak” Though, “further ahead, if the economy recovers broadly in line with the MPC’s latest projections, some modest tightening of policy may be needed to maintain inflation sustainably at the target.”
Statement and monetary policy report.
Sterling recovers notably after the decision. In particular, EUR/GBP was knocked from 0.8487 minor resistance and retains near term bearishness in the cross. That is, corrective recovery from 0.8276 has completed at 0.8595 already. Break of 0.8386 will bring retest of 0.8276 low next.
