Central Banks

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The Bank of England voted 9 to 0 to maintain Base Rate at 0.75%. The asset purchase target of £435 billion for corporate and UK government bond purchases was voted unaminous.


BoECarney

Highlights:

Bank of England announces 1 November monetary policy decision

  • Unchanged at prior 0.75%
  • Official bank rate votes 0-0-9 vs 0-0-9 expected
  • Asset purchase target £435 bn vs £435 bn expected
  • Corporate bond target £10 bn vs £10 bn expected

Statement Breakdown 

  • Ongoing tightening of monetary policy appropriate if economy grows as forecast '
  • Any future increases in bank rate likely to be at gradual pace and to be a limited extent
  • Market interest rate implies slightly steeper rise in bank rate
  • That means reaching 1.4% by late 2021 (in August this was 1.1%)
  • Monetary policy response to Brexit is not automatic, could be in either direction
  • Forecasts growth of +0.6% q/q in Q3, +0.3% q/q in Q4
  • Forecasts growth of +0.4% q/q in subsequent quarters
  • Cuts 2018 GDP growth to +1.3% (August +1.4%)
  • Cuts 2019 GDP forecast to 1.7% (August +1.8%), forecasts GDP at 1.7% for 2020, 2021

Source: Bank of England

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