Money in United Kingdom
United Kingdom - Money
BoE leaves rates unchanged
At its meeting ending on 31 October, the Monetary Policy Committee (MPC) of the Bank of England (BoE) voted unanimously to keep the Bank Rate unchanged at 0.75%. The Bank was also in full agreement to maintain the stock of investment-grade corporate bond purchases at GBP 11 billion and to maintain the total stock of UK government bond purchases at GBP 435 billion, financed by the issuance of Central Bank reserves. All decisions were in line with market expectations.
Following a rate hike in August, the decision to stay put in November was no surprise. Headline inflation dimmed in September following a surprise uptick in August, and core price pressures are mild. Moreover, the economy looks set to lose steam in the fourth quarter, and the government is yet to reach a Brexit agreement with the EU. The confluence of these factors led the Bank to decide that it was premature to continue its tightening cycle, which began in November last year. The BoE was unable to factor in the recently announced 2019 budget in its decision-making process, although the measures announced in the budget are unlikely to significantly alter the Bank’s stance.
In its communiqué, the BoE reiterated its guidance that monetary policy will tighten going forward, albeit gradually and to a limited extent. The Bank also emphasized the impact Brexit could have on monetary policy decisions, and left the door open to monetary easing in the case of a disorderly withdrawal. Assuming an orderly EU withdrawal, domestic price pressures are likely to build on emerging capacity constraints, necessitating subsequent rate hikes. Virtually all Met the why particular panelists see the BoE raising rates at least once next year to ensure inflation returns to target.
All our panelists see the BoE leaving rates unchanged at its last meeting of 2018, on 20 December. Our panelists expect the Bank Rate to end 2019 at 1.06% and 2020 at 1.35%.
United Kingdom - Money Data
|Money (annual variation in %)||5.4||6.2||5.9||3.1||3.1|
5 years of economic forecasts for more than 30 economic indicators.
United Kingdom Money Chart
Source: Bank of England (BoE).
United Kingdom Facts
|Bond Yield||1.52||-3.04 %||Nov 13|
|Exchange Rate||1.30||-0.35 %||Nov 13|
|Stock Market||7,054||-0.26 %||Nov 13|
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November 1, 2018
At its meeting ending on 31 October, the Monetary Policy Committee (MPC) of the Bank of England (BoE) voted unanimously to keep the Bank Rate unchanged at 0.75%.