The Bank of England's (BOE) Monetary Policy Committee (MPC) decided to leave the policy rate unchanged at 0.1% at its June policy meeting as expected. Furthermore, the BoE ramped up the Quantitative Easing (QE) program by £100 billion to £745 billion.
Follow our live coverage of the BoE event and the market reaction.
With the initial market reaction, the GBP/USD pair edged higher and was last seen gaining 0.08% on the day at 1.2545.
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The BOE met expectations by announcing it is expanding its bond-buying scheme by £100 billion. Its total support for the government's efforts to mitigate coronavirus now stands at £300 billion, yet may be insufficient and the UK's slow emergence from fighting the disease.
GBP/USD jumps back closer to session tops, around mid-1.2500s post-BoE.
The GBP/USD pair has managed to recover a major part of its early lost ground and moved back closer to session tops, post-BoE.
Key takeaways from the policy statement
"Asset purchases can now be conducted at a slower pace."
"In order to complete the existing programme of asset purchases, the bank would continue to purchase corporate bonds, such that around 10 billion pounds of these bonds were purchased by the end of the programme."
"Remainder of the existing programme comprised of further government bond purchases."
"Andrew Haldane voted against QE expansion."
"Haldane sees recovery in demand and output was occurring sooner and materially faster than had been expected at the time of the previous MPC meeting."
"Haldane sees material downside risks, especially to employment, but more evenly balanced than in May."
"In an environment of heightened uncertainty, some members envisaged a role for monetary policy in seeking to mitigate the potential impact of more adverse economic scenarios, including the second wave of COVID-19."
"Some members noted that risk management considerations favoured a prompt response to downside risks at present in order to ensure a sustained return of inflation to the target."
"Recent demand and output data had not been quite as negative as expected, other indicators suggested greater risks around the potential for longer-lasting damage to the economy from the pandemic."
"UK corporate bond purchase target unchanged at £20 billion."
"UK gilt purchase target stands at £725 billion."
"Risky asset prices have recovered further from their March lows, although they have remained sensitive to the news on the evolution of the pandemic."
"Recent data out turns suggest that the fall in global GDP in the second quarter of 2020 will be less severe than expected at the time of the may monetary policy report."
"There are signs of consumer spending and services output picking up."
"Evidence from more timely indicators suggests that GDP started to recover after April."
"Labour market has weakened materially."
"A greater number of workers are likely to be furloughed in the second quarter."
"Current below-target rates of CPI inflation can in large part be accounted for by the effects of the pandemic."
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