BoE maintains Bank Rate at 0.75%

The Bank of England (BoE) announced its Monetary Policy Committee (MPC) voted by a majority of 7-2 to maintain Bank Rate at 0.75 percent at its January 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 notes:

• UK GDP growth slowed last year, reflecting weaker global growth and elevated Brexit uncertainties
• Output is expected to have been flat in 2019 Q4
• CPI inflation fell to 1.3% in December and core CPI inflation declined to 1.4%
• Unemployment rate has remained low and stable, and employment growth has picked up
• Most recent indicators suggest that global growth has stabilized, reflecting the partial easing of trade tensions and the significant loosening of monetary policy by many central banks over the past year
• Global business confidence and other manufacturing indicators have generally picked up. Domestically, near-term uncertainties facing businesses and households have receded
• Housing market indicators have strengthened and consumer confidence has increased slightly
• MPC will monitor closely the extent to which these early indications of an improved outlook are sustained and follow through to the hard data on domestic activity in coming months
• UK GDP growth is projected to pick up a little in early 2020
• CPI inflation is projected to remain below the MPC's 2% target throughout this year and much of 2021
• Monetary policy will be set to ensure a sustainable return of inflation to the 2% target
• Policy may need to reinforce the expected recovery in UK GDP growth should the more positive signals from recent indicators of global and domestic activity not be sustained or should indicators of domestic prices remain relatively weak
  
• If the economy recovers broadly in line with the MPC's latest projections, some modest tightening of policy may be needed to maintain inflation sustainably at the target