Bank of England leaves policy rate unchanged at 0.75% in November as expected
- Bank of England (BoE) held policy rate steady at 0.75%.
- BoE left Asset Purchase Facility unchanged at £435 billion.
- Two members of the MPC voted in favour of a rate cut.
In a widely expected decision, the Bank of England's Monetary Policy Committee held the policy rate unchanged at 0.75%. The asset purchase facility remained steady at €435 billion as well.
On a dovish note, 2 members of the Monetary Policy Committee voted to cut the policy rate. With the initial market reaction, the GBP/USD pair came under strong bearish pressure and was last down 0.2% on the day at 1.2825. Below are key takeaways from the policy statement.
"Policymakers Saunders and Haskel vote to cut rates to 0.5% from 0.75%."
"Saunders and Haskel say stimulus needed now as data suggest labour market turning, also see downside risks from the global economy and Brexit."
"May need to "reinforce" expected recovery in UK economy through monetary policy if global growth fails to stabilise or if brexit uncertainty remains entrenched."
"If risks do not materialise and economy performs in line with forecast, modest tightening of policy at gradual and limited pace may be needed."
"UK economy likely to be 1% smaller by Q4 2022 than it expected in August forecasts due to global slowdown, asset price changes and new Brexit assumptions."
"Brexit assumption changed to be based on an orderly transition to Canada-style free trade agreement over the next few years."
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
