Breaking: BOE refrains from detailing no-deal scenario, GBP/USD stablizes
|The Bank of England has left the interest rate unchanged at 0.75% in a unanimous vote as broadly expected. The bank has refrained from detailing projections for a scenario in which the UK leave the EU without a deal. The London-based institution has maintained its intention to raise interest rates after Brexit uncertainty is removed. Such rate hikes are set to be limited and gradual according to the statement.
The bank's quarterly inflation report consists of downgrades to GDP growth forecasts. The "Old Lady" sees 2019 growth standing at 1.3% compared to 1.5% in the previous QIR. On the other hand, the bank has upgraded its inflation forecasts. In the next year, the BOE projects prices to pick up by 1.9% instead of 1.73% in May's report.
GBP/USD is trading around 1.2100, finding some solace after significant falls beforehand.
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The Bank of England was expected to leave the Official Bank Rate at 0.75% once again and vote unanimously for this policy. Apart from the rate statement and the accompanying meeting minutes, the BOE releases its Quarterly Inflation Report (QIR) which is then followed by Governor Mark Carney's press conference.
Some had expected the BOE to remove its intentions to raise rates amid the global slowdown and also the falling chances of a smooth Brexit. The new government led by PM Boris Johnson has been adamant about its desire to leave the EU by the October 31st deadline – "do or die" as the PM stated. GBP/USD has The pound has been reacting with an outright plunge to the news.
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