The Bank of England has left its interest rate unchanged in a unanimous vote as expected but has changed its tone. The bank has cut its Q2 growth forecast to 0% from 0.2% and says it is seeing increasing signs that wage growth has leveled off. The BOE still intends to tighten its monetary policy albeit it at a limited and gradual pace.
Downside risks have increased in comparison to the previous rate decision.
GBP/USD has dropped below 1.2700 after reaching a high of 1.2726 earlier in the day.
The Bank of England was expected to leave its interest rate unchanged at 0.75% in a unanimous vote. However, some have expected the BOE to alter its language and drop its intention to raise rates. The Federal Reserve, the European Central Bank, and other central banks have changed their policy amid low inflation and rising uncertainty related to trade.
In the UK, Brexit uncertainty is elevated while economic data has been mixed. Governor Mark Carney will deliver a speech at Mansion House later in the day.
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