BoE leaves policy unchanged, as expected
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The Bank of England decided by unanimous vote to leave the Bank Rate at 0.25%, as widely anticipated.
The Monetary Policy Committee (MPC) also voted unanimously to continue with the programme of £60 billion of UK government bond purchases to take the total stock of these purchases to £435 billion, financed by the issuance of central bank reserves.
The Bank of England’s MPC sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment.
Looking forward, the MPC expects inflation to rise to the 2% target within six months. Since the Committee’s previous meeting, sterling’s trade-weighted exchange rate has appreciated by over 6%, while dollar oil prices have risen by 14%. All else equal, this would result in a slightly lower path for inflation than envisaged in the November Inflation Report, though it is still likely to overshoot the target later in 2017 and through 2018.
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