In a widely expected decision, the Bank of England's Monetary Policy Committee held the policy rate unchanged at 0.75% with a unanimous vote. The asset purchase facility remained steady at €435 billion as well. Below are some key takeaways from the monetary policy statement.
"Policymakers vote 9-0 to maintain corporate bond purchase target at 10 billion sterling."
"Q1 GDP likely boosted by stock-building, underlying growth "slightly stronger" than expected in February."
"Sees inflation increasingly above target at end of forecast horizon, economy running above capacity."
"Gradual and limited interest rate rises needed to meet inflation target over forecast period."
"Overall slack in economy is 0.25% of GDP, sees zero slack in 1 year's time, excess demand of 1% of GDP in 3 years' time."
"Energy price cap to push inflation above target in April, sterling strength and energy base effects to push CPI below target around 1-year horizon."
"Cost of waiting for more information on inflation pressure relatively low, pay growth levelling off."
"Policy response to Brexit not automatic, could be in either direction."
"Two thirds of firms surveyed say ready for a "no deal, no transition" Brexit, but still expect fall in output and jobs."
"Economic outlook will depend significantly on Brexit, BoE forecasts continue to assume smooth transition."
BOE Interest Rate Decision is announced by the Bank of England. If the BoE is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the GBP. Likewise, if the BoE has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
Source : FXstreet