Nothing New From the BOE as Brexit Remains the Game for the GBP

Posted Thursday, March 21, 2019 by
Skerdian Meta • 1 min read

The meeting from the Bank of England is over now. They kept interest rates unchanged as expected with an unanimous vote and released the monetary policy summary. The GBP jumped around 45 pips higher after the event but has retreated lower now, giving back half the gains. Here are the highlights from the event:

  • BOE leaves interest rates unchanged at 0.75% as expected
  • MPC votes unanimously to keep rates unchanged with a 0-0-9 vote
  • Asset purchase target remains at £435 billion
  • Corporate bond target at £10 billion

Comments on the monetary policy summary

  • Brexit could prompt policy moves in either direction
  • Employment growth could now moderate significantly
  • Underlying inflation broadly on track with forecast
  • Gradual, limited tightening still probably needed.
  • Monetary response to Brexit is not automatic and could be in either direction
  • Brexit uncertainties continue to weigh on confidence and short-term economic activity

More or less, what we already knew. Brexit is the driving force for the GBP and the Bank of England right now so they can’t do anything until Brexit takes a clear direction. But as we hear, another delay will take place, either for a few months or until the end of the year, so the uncertainty keeps being dragged down the road.

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