Bank of England leaves policy rate unchanged at 0.75% as expected
In a widely expected decision, the Bank of England's Monetary Policy Committee held the policy rate unchanged at 0.75% with a unanimous vote. The asset purchase facility remained steady at €435 billion as well. Below are some key takeaways from the monetary policy statement.
- At its meeting ending on 19 December 2018, the MPC voted unanimously to maintain Bank Rate at 0.75%.
- The Committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion.
- Since the MPC’s previous meeting, the near-term outlook for global growth has softened and downside risks to growth have increased.
- Brexit uncertainties have intensified considerably since the Committee’s last meeting.
- Sterling has depreciated further, and its volatility has risen substantially.
- The further intensification of Brexit uncertainties, coupled with the slowing global economy, has also weighed on the near-term outlook for UK growth.
- The broader economic outlook will continue to depend significantly on the nature of EU withdrawal.
- The appropriate path of monetary policy will depend on the balance of the effects on demand, supply and the exchange rate.
- The monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction.