The Bank of England's (BoE) Monetary Policy Committee (MPC) decided to leave the benchmark interest rate unchanged at 0.10% at its January policy meeting and kept the Asset Purchase Facility steady at £895 billion.
Follow our live coverage of the BoE policy announcements and the market reaction.
With the initial market reaction, the GBP/USD pair erased a portion of its daily losses and was last seen losing 0.3% on a daily basis at 1.3605.
Key takeaways from policy statement as summarized by Reuters
"UK GDP is expected to have risen a little in 2020 Q4 to a level around 8% lower than in 2019 Q4."
"GDP in Q4 materially stronger than expected."
"Impact of COVID measures is not expected to be as severe as in 2020 Q2."
"GDP is expected to fall by around 4% in 2021 q1, in contrast to expectations of a rise in the November report."
"Labour market indicators remain difficult to interpret."
Other indicators suggest that labour market slack has remained higher than implied by LFS rate."
"The government's employment support schemes are likely to limit significantly the immediate rise in unemployment."
"There has been relatively little reaction in markets to a trade deal between the EU and the UK which was largely in line with market expectations."
"When covid restrictions are eased, the combined effects of higher demand and lower uncertainty about the UK and the EU's trading relationship would positively affect businesses making hiring and investment decisions."
"Risks around economic activity from pandemic developments were, on balance, tilted to the downside, although less so than in the November report."
"Risk management considerations had implied that policy should lean strongly against downside risks to the outlook."
"If the outlook for inflation weakened, the committee stood ready to take whatever additional action was necessary to achieve its remit."
"Committee did not intend to tighten monetary policy at least until there was clear evidence that significant progress was being made in eliminating spare capacity and achieving the 2% inflation target sustainably."
"Committee continued to envisage that the pace of gilt purchases could remain at around its current level initially, with the flexibility to slow the pace of purchases later."
"Scope for the Bank of England to re-evaluate the existing technical parameters of the gilt purchase programme."
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