Breaking: Bank of England leaves policy settings unchanged as expected

The Bank of England's (BoE) Monetary Policy Committee (MPC) decided to leave the benchmark interest rate unchanged at 0.10% following the June policy meeting and kept the Asset Purchase Facility steady at £895 billion as widely expected.

Follow our live coverage of the BoE policy announcements and the market reaction.

Market reaction

The British pound came under strong bearish pressure with the initial reaction and the GBP/USD lost more than 50 pips in a matter of minutes. As of writing, the pair was down 0.23% on a daily basis at 1.3927.

Key takeaways from policy statement as summarized by Reuters

"MPC votes 8-1 to maintain gilt purchase target."

"MPC votes unanimously to maintain corporate bond purchase target."

"Andrew Haldane voted against this proposition, preferring to continue with the existing programme of UK government bond purchases but to reduce the target for the stock of these purchases from £875 billion to £825 billion."

"Since May, developments in global gdp growth had been somewhat stronger than anticipated, particularly in advanced economies."

"Since the MPC's previous meeting, global price pressures had picked up further, and had started to become apparent in consumer price inflation in some advanced economies."

"Direct economic implications of these delays in the final stages of the relaxation of covid restrictions were likely to be relatively small compared with the impact of previous stages."

"Bank staff had revised up their expectations for the level of 2021 Q2 GDP by around 1½% since the May report."

"Most MPC members felt risk management considerations still had force although downside risks were judged to have fallen as the recovery had taken hold."

"Most MPC members felt policy should both lean strongly against downside risks to the outlook and ensure that the recovery was not undermined by a premature tightening in monetary conditions."

"Most members felt forthcoming data had the potential to provide an early indication of sustained economy-wide inflationary pressures."

"MPC also felt that weight should also be put on inflation developments over a somewhat longer period of time."

"MPC members felt it would be important to continue to monitor closely movements in measures of medium-term inflation expectations."