Bank Of England Stands Pat On Rates, QE
13 Septiembre 2018 - 3:21AM
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Bank of England policymakers unanimously decided to maintain the
monetary policy stance on Thursday, after resorting to a
quarter-point rate hike in August.
The Monetary Policy Committee, led by Governor Mark Carney,
voted 9-0 to keep the key rate unchanged at 0.75 percent.
The committee also unanimously decided to maintain the
quantitative easing through asset purchases at GBP 435 billion.
Policymakers said if the economy continues to develop broadly in
line with the August Inflation Report projections, an ongoing
tightening of monetary policy over the forecast period would be
appropriate to return inflation sustainably to the 2 percent
target.
The MPC reiterated that any future increases in Bank Rate were
likely to be at a gradual pace and to a limited extent.
Ruth Gregory, an economist at Capital Economics, said the MPC
will tread cautiously until Brexit uncertainty has been
resolved.
Indeed, a Brexit deal will be struck at the eleventh hour, which
will probably prevent the MPC from lifting rates again until next
year, the economist added.
Chancellor Philip Hammond announced on Tuesday that Carney will
stay at the helm of the central bank until the end of January 2020
to support a smooth Brexit and transition.
The BoE Governor has not ruled out a no-deal Brexit and had
warned earlier that the economy would suffer a shock if that is the
case.
Despite the ongoing uncertainty over Brexit negotiations, the
economy expanded 0.6 percent in the three months to July, the
fastest since August 2017.
Warm weather and the World Cup boosted retail sales and recovery
in construction underpinned economic growth.
BoE staff raised their growth outlook for the third quarter to
0.5 percent from 0.4 percent. Growth in manufacturing is likely to
rebound in the third quarter after erratic weakness in the second
quarter, bank said.
Recent developments have increased downside risks around global
growth to some degree. Further protectionist measures by the United
States and China, if implemented, could have a somewhat more
negative impact on global growth than was anticipated in
August.
According to Agents' summary of business conditions, uncertainty
around Brexit contributed to a slight softening in investment
intentions.
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