Bank of England

December 14, 2017

The Bank of England was not expected to tighten policy at consecutive monthly meetings, and the Monetary Policy Committee was unanimous in voting to retain a 0.50% bank rate and leave asset purchase ceilings as they’ve been. A statement gives a thumbs up to recent progress in the Brexit talks and for Chancellor Hammond’s budget that should have a boosting influence on growth next year. The policy bias is toward some further normalization, but quite some further time is likely to elapse before a second interest rate hike is undertaken:

The Committee remains of the view that, were the economy to follow the path expected in the November Inflation Report, further modest increases in Bank Rate would be warranted over the next few years, in order to return inflation sustainably to the target.  Any future increases in Bank Rate are expected to be at a gradual pace and to a limited extent.  The Committee will monitor closely the incoming evidence on the evolving economic outlook, including the impact of last month’s increase in Bank Rate, and stands ready to respond to developments as they unfold to ensure a sustainable return of inflation to the 2% target.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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