The Bank of England increased the Bank rate by 25 basis points to 0.50% in line with expectations.
The Bank of England increased the Bank rate by 25 basis points to 0.50% in line with expectations.
Voting pattern was 7-2 for the rate hike with BOE deputy governors Jon Cunliffe and Dave Ramsden dissenting.
BoE said all members agree that any future rate rises expected to be “at a gradual pace and to a limited extent” forecasting only two additional rate hikes in next 3 years.
At its meeting ending on 1 November 2017, the MPC voted by a majority of 7-2 to increase Bank Rate by 0.25 percentage points, to 0.5%. The Committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion.
Alongside the announcement, it also published its quarterly Inflation Report.
CPI to peak at 3.2% in Oct vs c.3% previous forecast
BoE’s Carney Comments:
- Domestic CPI Pressures Likely To Build In Coming Years
- Company Balance Sheets Are Generally In Strong Shape
- Brexit-Related Constraints Adding To Drag On Potential
- Brexit Biggest Determinant For Economic Outlook
- We Are Going To Be In Exceptional Circumstances At Least Until There Is A Resolution Of UK Relations With EU
- Very Positive That UK Economy Is Shifting From Consumer Demand To Exports And Business Investment
- UK Rate Decision Not Driven By Exchange Rate
Sterling fell more than a cent against the dollar to $1.3125.
Against the euro, the pound was also down by more than a cent at €1.1267.
Source: Bank of England, BBC, Forexlive, LiveSquawk