Bank of England announced its first monetary policy decision of 2024 today at 12:00 pm GMT. Market was expecting no change in the level of interest rates, with the main policy rate remaining at 5.25%. There was no surprise - rates were left unchanged.
However, there were some surprise when it comes to a vote split. Economists expected 8 out of 9 MPC members to vote for a hold and 1 member to vote for a hike. Actual split showed 2 MPC members voting for a hike, 6 voting for a hold and 1 voting for a cut. A reference to 'risk of further tightening' was dropped from the statement - similarly as it was the case with FOMC yesterday. However, it was also noted that more confidence is needed on inflation before rates can be reduced. 2024 GDP forecast was boosted from no growth (0.00%) to 0.25% expansion. BoE expects inflation to drop below target by Q4 2025 should key policy rate be left unchanged at current level and to reach 2.3% in Q1 2026 should rates be lowered in-line with market expectations.
GBP gained on the news with GBPUSD rebounding further away from 1.2625 support zone, that was tested earlier today. Source: xStation5
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