- Prior 5.25%
- Bank rate vote 6-3 vs 6-3 expected (Greene, Haskel, Mann voted to raise by 25 bps)
- The decision to hike or to hold was again "finely balanced"
- Still some way to go on inflation
- To take necessary decisions to get inflation all the way back to 2%
- Policy will need to be sufficiently restrictive for sufficiently long
- Most policymakers say it it too early to conclude that services inflation or pay growth are on a firmly downward path
- Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures
- Sees inflation just under 4.5% by year-end (previously 4.75%)
- Full statement
No pivot. That's the main takeaway at first glance when viewing the BOE statement as they continue to reaffirm that there is not enough evidence to suggest that disinflationary pressures are winning out. They also keep the passage in maintaining that more tightening might be required, so that keeps the door open even if they don't intend to raise interest rates anymore.
The pound has moved higher as a result with GBP/USD up from around 1.2660 earlier to 1.2710 currently. That comes as the BOE maintains a more hawkish rhetoric (definitely much more when compared to the Fed yesterday) despite a mildly softer inflation forecast for the year.
