BOE announces its latest monetary policy decision - 20 December 2018
- Prior decision 0.75%
- Official bank rate votes 0-0-9 vs 0-0-9 expected
- Asset purchase target £435 billion
- Corporate bond target £10 billion
Here's the statement details:
- Domestic inflation pressures continue to build
- Now sees inflation falling below 2% target in January
- UK GDP outlook has weakened, sees 0.2% growth in Q4
- Q1 2019 growth around 0.2% as well
- Brexit uncertainties have intensified since November
- Current stance of monetary policy is appropriate
- Main challenge is to assess implications of Brexit
Nothing surprising here from the BOE decision as this is as non-event as you can get. There is a slight dovish take in all of this as they foresee that growth and inflation will be a tad weaker. They also noted that downside risks to global growth has increased and the world economy is slowing more than they anticipate it to be. With regards to wages, the BOE says that near-term risks to pay growth are slightly to the upside so that's a bit of a plus.
But once again, all these forecasts and what not are very much overshadowed by Brexit so you can't really look too much into it as the Brexit outcome could yet invalidate everything here.
GBP/USD holds steady at 1.2685 currently, little changed from the decision. EUR/GBP sits a little higher on the day still at 0.9033.
