BoE leaves policy unchanged, as expected

Ani Salama FXStreet

The Bank of England decided by unanimous vote to leave the Bank Rate at 0.25%, as widely anticipated.

The Monetary Policy Committee (MPC) also voted unanimously to continue with the programme of £60 billion of UK government bond purchases to take the total stock of these purchases to £435 billion, financed by the issuance of central bank reserves.

The Bank of England’s MPC sets monetary policy to meet the 2% inflation target, and in a way that helps to sustain growth and employment.

Looking forward, the MPC expects inflation to rise to the 2% target within six months. Since the Committee’s previous meeting, sterling’s trade-weighted exchange rate has appreciated by over 6%, while dollar oil prices have risen by 14%. All else equal, this would result in a slightly lower path for inflation than envisaged in the November Inflation Report, though it is still likely to overshoot the target later in 2017 and through 2018.

Author

Ani Salama

FXStreet

Ani Salama is an Economist specialized in financial markets and statistics analysis. In 2010, she joined FXstreet where she now contributes with the news section.

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