BOE leaves interest rate on hold. Vote 7-2 vs 9-0 exp/prev

Bank of England interest rate announcement now out 22 March

  • bank rate 0.5% as exp/prev
  • vote 7 for hold vs 2 for hike
  • asset purchase target GBP435bln as exp/prev
  • corp bond target  GBP 10bln as exp/prev

As per my preview it’s the vote count change to watch out for but hike expectations factored in .

  • McCafferty and Saunders voted to hike
    – Dissenters saw widespread evidence of near-zero slack and accelerating wage growth
    – May IR would allow a fuller view of underlying economic momentum
    – MPC note poor weather to have negative impact on Q1 GDP, offset by mining & quarrying output
    – Net trade, business investment contributing less than anticipated at present
    – Latest activity suggests Q1 2018 growth now similar to Q4 2017 (0.3%)
    – MPC unanimous in vote to maintain UK government bond purchases at GBP435B; APF at GBP10B
    – Recent data broadly in line with Feb QIR outlook
    – Impact of US tariffs likely to be limited, however, an unwelcome situation

GBPUSD 1.4215   EURGBP 0.8682  GBPJPY  

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