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 with a corporate bond target £10 billion for bond purchases was voted unaminous.

BoECarney

Highlights:

Bank of England announces 20 June 2019 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 

  • Downside risks have increased since May as global trade tensions intensify
  • Cut Q2 GDP estimate to 0.0% from +0.2% q/q previously
  • Ongoing tightening of monetary policy at gradual and limited pace is needed
  • This scenario assumes a smooth Brexit CPI likely to fall below 2% target later this year
  • But inflation expectations remain well-anchored
  • See increasing signs that wage growth rates might have leveled off
  • Underlying economic growth in the UK appears to have weakened slightly in 1H 2019

Source: Bank of England

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