BoE leaves policy rate unchanged at 0.75% with unanimous vote as expected, GBP weakens


  • BoE keeps policy rate steady at 0.75% as expected.
  • Bank says tightening of monetary policy at gradual and limited pace needed, assuming smooth Brexit.
  • Notes downside risks to growth have increased since May. 

In a widely expected decision, the Bank of England's Monetary Policy Committee held the policy rate unchanged at 0.75% with a unanimous vote. The asset purchase facility remained steady at €435 billion as well.

With the initial market reaction, the British pound came under a renewed pressure and weakened against both the dollar and the euro. Below are some key takeaways from the BoE's press release, as reported by Reuters.

"Bank of England policymakers vote 9-0 to hold interest rate at 0.75%."

"Policymakers vote 9-0 to maintain gilt purchase target at 435 billion sterling."

"Policymakers vote 9-0 to maintain corporate bond-purchase target at 10 billion sterling."

"BoE cuts estimate of Q2 UK GDP quarterly growth to zero (May forecast +0.2% QoQ)."

"Downside risks to growth have increased since May as global trade tensions intensify, perceived likelihood of no-deal Brexit rises."

"Underlying economic growth in UK appears to have weakened slightly in first half of 2019."

"Ongoing tightening of monetary policy at gradual and limited pace needed, assuming smooth Brexit."

"UK financial conditions have loosened, implies stronger GDP, excess demand and inflation forecasts vs May."

"Market forward pricing for bank rate has fallen markedly, driven by global growth risks and rise in perceived likelihood of no-deal Brexit."

"Market moves show tension between BoE assuming a smooth Brexit and the market pricing in other Brexit scenarios."

"CPI likely to fall below 2% target later this year."

"Core services CPI slightly below levels consistent with meeting inflation target, unit wage cost growth consistent with target."

"Inflation expectations remain well-anchored."

"Sees increasing signs that wage growth rates might have levelled off."

"MPC agrees to reinvest 3.8 billion sterling of cash from maturing July 2019 gilt in QE programme."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD surges toward 1.3150 amid upbeat UK data, USD weakness

GBP/USD has been extending its gains after the British CBI Trends figure beat expectations. Markets are pricing a BOE rate cut less aggressively. The US dollar is on the back foot across the board amid reduced coronavirus fears.

GBP/USD News

EUR/USD struggles to recover amid Trump's tariff threats

EUR/USD is trading below 1.11, close to the three-week lows, as President Trump continues threatening the EU with car tariffs. Markets remain concerned about the spreading coronavirus disease. 

EUR/USD News

BoC goes dovish, USD/CAD jumps above 1.31

In a widely expected decision, the Bank of Canada on Wednesday announced that it left its policy rate unchanged at 1.75% at its January policy meeting. In its policy statement, the BoC noted that it sees less risk of an extreme downside scenario related to trade tensions.

Read more

Gold Price Analysis: Intraday uptick falters near 50-hour SMA, remains vulnerable

Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Wednesday.

Gold News

USD/JPY rises above 110.00, potential head-and-shoulders on 1H

Risk reset in stocks is boding well for USD/JPY.  The pair may be forming a head-and-shoulders pattern on the hourly chart. The bulls are not out of the woods yet and a break above 110.12 is needed to invalidate lower highs setup on the hourly chart.

USD/JPY News

Forex MAJORS

Cryptocurrencies

Signatures