BoE maintains Bank Rate at 0.75%, lowers Q2 GDP forecast

The Bank of Egland (BoE) announced its Monetary Policy Committee (MPC) voted unanimously to maintain Bank Rate at 0.75 percent at its latest meeting.

The MPC also voted unanimously to maintain the corporate bond purchases at £10 billion and UK government bond purchases at £435 billion.

In its statement, the BoE says:

• the recent UK data have been volatile, in large part due to Brexit-related effects on financial markets and businesses
• underlying growth in the United Kingdom appears to have weakened slightly in the first half of the year relative to 2018
• downside risks to growth have increased due to intensified trade tensions and perceived likelihood of a no-deal Brexit
• GDP is now expected to be flat in Q2 (down from +0.2% q/q previously) after growing by 0.5% in 2019 Q1
• CPI inflation is likely to fall below the 2% target later this year, reflecting recent falls in energy prices
• the labour market remains tight
• the economic outlook will continue to depend significantly on the nature and timing of EU withdrawal
• the appropriate path of monetary policy will depend on the balance of these effects on demand, supply and the exchange rate
• the Committee will always act to achieve the 2% inflation target