Rabobank analysts point out that as per expected lines, the Bank of England MPC kept rates unchanged at 0.75% and there were no dissenters, even though there had been some speculation of a split vote.

Key Quotes

“The statement notes that the downside risks to growth have increased due to trade tensions and Brexit uncertainties. The MPC also expects inflation to fall below the 2%-target later this year.”

“The forward guidance was left untouched nonetheless. The MPC still judges that a tightening of monetary policy at a gradual pace and to a limited extent would be appropriate.”

“This optimism is grounded on a model-based view of the world, which in turn is centred on the assumption of a smooth transition towards new trading relationships. The market is not willing to take this for granted – rightly so.”

“Despite several recent hawkish speeches, there was no signal that the MPC actually wants to hike this year. We forecast no rate hikes for this year and next.”