BOE Monetary Policy Maintained at 0.75% – Key Takeaways - Forex News by FX Leaders

BOE Monetary Policy Maintained at 0.75% – Key Takeaways

Posted Thursday, August 1, 2019 by
Arslan Butt • 1 min read

The BOE’s Monetary Policy Committee has voted unanimously to maintain Bank Rate at 0.75%. The committee also voted unanimously to maintain the stock of corporate bond purchases and UK government bond purchases.

Key Highlights

  • The pound is trading at $1.2115 now, down 0.37% on the day – similar to where it was just before the Bank of England rate decision and economic forecasts were published.
  • Bank of England policymakers voted 9-0 to hold the key interest rate at 0.75%.
  • Bank noted that the increased risk of a disorderly Brexit had led to a “marked depreciation of the sterling exchange rate”.
  • BOE forecasted GDP growth of 1.3% for 2019 and 2020, down from 1.5% and 1.6% respectively in its previous projections in May. The forecasts assume that Britain avoids a disorderly Brexit.
  • The Bank noted that Brexit uncertainty has become entrenched in the economy in 2019 and that this has pulled down the rate of economic growth. Our view on the economy is similar: we expect growth of 1.4% this year and 1.3% in 2020, on the assumption that a no-deal Brexit is avoided.
  • If there is a smooth Brexit and the economy holds up, interest rates may well rise, the Bank of England said in its quarterly inflation report.
  • On the other hand, if there is a downturn due to Brexit, the Bank could cut rates or take other action.

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About the author

Arslan Butt // Index & Commodity Analyst
Arslan Butt is our Lead Commodities and Indices Analyst. Arslan is a professional market analyst and day trader. He holds an MBA in Behavioral Finance and is working towards his Ph.D. Before joining FX Leaders Arslan served as a senior analyst in a major brokerage firm. Arslan is also an experienced instructor and public speaker.
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