BoE interest rate decision: MPC stands ready to respond to changes in the economic outlook

Following its monetary policy decisions, the Bank of England published the "Bank of England Inflation Report November 2017," providing the key headlines found below.

The MPC’s outlook for inflation and activity in the November Inflation Report is broadly similar to its projections in August. 

Consumption growth remains sluggish in the near term before rising, in line with household incomes. 

CPI inflation rose to 3.0% in September. The MPC still expects inflation to peak above 3.0% in October, as the past depreciation of sterling and recent increases in energy prices continue to pass through to consumer prices.

The decision to leave the European Union is having a noticeable impact on the economic outlook.

The steady erosion of slack has reduced the degree to which it is appropriate for the MPC to accommodate an extended period of inflation above the target.

Monetary policy continues to provide significant support to jobs and activity in the current exceptional circumstances.

All members agree that any future increases in Bank Rate would be expected to be at a gradual pace and to a limited extent.

There remain considerable risks to the outlook, which include the response of households, businesses and financial markets to developments related to the process of EU withdrawal.

The MPC will respond to developments as they occur insofar as they affect the behaviour of households and businesses, and the outlook for inflation. 

Key notes

GBP/USD tumbles to 1.3100 post-BoE.

The Sterling is accelerating the daily downside today, forcing GBP/USD to drop to the area of weekly lows in the 1.3100 neighbourhood.

EUR/GBP surges to 0.89 handle post-BoE announcement.

The EUR/GBP cross extended its recovery move and surged to fresh weekly tops, around the 0.8900 handle following the highly anticipated BoE decision. 

About Mark Carney 

Mark Carney is Governor of the Bank of England and Chairman of the Monetary Policy Committee, Financial Policy Committee and the Board of the Prudential Regulation Authority. His appointment as Governor was approved by Her Majesty the Queen on 26 November 2012. The Governor joined the Bank on 1 July 2013.