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