The Bank of England decided to take a wait-and-see approach during its last monetary policy meeting of 2020 due to the uncertainties surrounding the Brexit trade deal. BOE left its benchmark interest rate unchanged at a record low of 0.1% and the bond-buying programme at £875 billion, after extending it by a larger-than-expected £150 billion in November. Policymakers said that the existing stance of monetary policy remains appropriate and vaccines are likely to reduce downside risks to economic outlook. The Central Bank expects that Q4 GDP will be a little weaker than expected in the November report. However should market functioning worsen materially again, BoE is ready to increase pace of asset purchases to ensure effective transmission of monetary policy.
GBPUSD saw a relatively small reaction to today’s BoE rate decision. Currency pair continues to trade above the 1.3600 level. Source: xStation5
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