Bank of England leaves base rate unchanged at 0.75% in January
- Bank of England (BoE) held policy rate steady at 0.75%.
- BoE left Asset Purchase Facility unchanged at £435 billion.
- Two members of the MPC voted in favour of a rate cut.
The Bank of England's Monetary Policy Committee held the policy rate unchanged at 0.75% in January. The asset purchase facility remained steady at €435 billion as well.
With the initial market reaction, the GBP/USD pair shot higher as some investors were expecting a 25 basis points rate cut. As of writing, the pair was up 0.4% on the day at 1.3072.
Key takeaways from the policy statement
"Policymakers vote 7-2 to hold bank rate at 0.75%."
"Policymakers vote 9-0 to maintain gilt purchase target at 435 billion GBP."
"Policymakers vote 9-0 to maintain corporate bond purchase target at 10 billion GBP."
"Policymakers Saunders and Haskel voted to cut bank rate to 0.5%."
"Monetary policy may need to reinforce expected growth recovery if recent signs of stronger global and domestic activity are not sustained, or domestic inflation stays relatively weak."
"Some modest tightening of monetary policy may be needed further out if economy recovers as forecast."
"Market rates imply slightly more BoE loosening than in nov, point to bank rate at 0.5% in 2020 and 2021."