- Prior 4.50%
- Bank rate vote 7-2-0 vs 8-0-1 expected (Dhingra, Taylor voted to cut by 50 bps while Mann, Pill voted to keep bank rate unchanged at 4.50%)
- There has been substantial progress on disinflation over the past two years
- That progress has allowed the BOE to withdraw gradually some degree of policy restraint
- But bank rate is still in restrictive territory so as to continue to squeeze out persistent inflationary pressures
- Progress on disinflation in domestic price and wage pressures is generally continuing
- Decision to cut the bank rate reflects continued progress in disinflation though with risks to inflation remaining in both directions
- A gradual and careful approach to further withdrawal of monetary policy restraint remains appropriate
- Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further
- Full statement
This article was written by Justin Low at www.forexlive.com.
