BOE leaves financial institution charge unchanged at 4.25%, as anticipated

• Prior 4.25%
• Bank rate vote 6-3 vs 7-2-0 expected (Dhingra, Taylor, and Ramsden voted to cut by 25 bps instead)
• Underlying UK GDP growth appears to have remained weak
• The labour market has continued to loosen
• There remain two-sided risks to inflation
• A gradual and careful approach to the further withdrawal of policy restraint remains appropriate
• Monetary policy is not on a pre-set path
• Will decide the appropriate degree of monetary policy restrictiveness at each meeting
• 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

The decision is as per expected and the bank rate vote coming in more or less in line with expectations as well. Ramsden is the additional dissenter to vote for another rate cut this time around. That being said, it doesn’t really change the picture all too much ahead of the summer for the BOE.

A rate cut in August remains a possibility but we’ll have to see what becomes of data developments and trade/geopolitical issues in the next two months.

Other than that, the statement language and guidance are very much a rehash of what we saw in May. So, there’s nothing new to really scurtinise here apart from mentioning that there are “two-sided risks” to inflation. But that is largely to reaffirm their decision to stay on hold today.

Cable is slightly down on the decision, from around 1.3428 to 1.3416 currently with the immediate low earlier touching 1.3405.