The Bank of England's (BoE) Monetary Policy Committee (MPC) decided to leave the benchmark interest rate unchanged at 0.10% at its December policy meeting and kept the Asset Purchase Facility steady at £895 billion.
Follow our live coverage of the BoE policy announcements and the market reaction.
Key takeaways from policy statement as summarized by Reuters
"The appropriate path of monetary policy would depend in part on the balance of the effects of the UK's new trading arrangements with the European Union, on demand and supply and the exchange rate."
"In the event that EU trade negotiations did not reach an agreement, the exchange rate would probably fall and, relative to the projections in the November report, CPI inflation would be likely to be higher and GDP growth weaker."
"Outlook for economy unusually uncertain depends on the evolution of pandemic as well as the nature of, and transition to, the new trading arrangements between the EU and the UK."
"The nature of future UK-EU trading arrangements had been cited by around half of firms in the decision-maker panel as one of the top three sources of uncertainty."
"The market-implied path for bank rate had ended the period little changed relative to the November MPC meeting."
"Economic activity has been stronger than expected despite the recent rise in covid cases and associated lockdowns."
"Restrictions on activity introduced after lockdowns have been tighter than assumed in November forecast and are expected to weigh more on activity in 2021 Q1."
"The additional fiscal measures in spending review 2020 are likely to boost GDP by an estimated peak of over 1% during 2021-22."
"The unemployment rate rose to 4.9% in the three months to October but other indicators suggest that labour market slack has increased by more than implied by this measure."
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