The Bank of England announced a monetary policy decision at 12:00 pm GMT. BOE raised its benchmark interest rate by 50bps to 4.0 % as widely expected. It was the 10th consecutive rate hike amid policymakers' efforts to combat high inflation and despite the risks of an expected economic recession this year. The central bank dropped its pledge to keep increasing them "forcefully" if needed and said inflation had probably peaked, which indicates a likely slowdown in the pace of hikes.
Interest rates in the US, UK and EU. Source: Bloomberg, XTB
Polcymakers said, if there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required.
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Open real account TRY DEMO Download mobile app Download mobile appForecast shows inflation in one year's time at 3.01% (November forecast: 5.2%), based on market interest rates and modal forecast.
BoE forecast shows inflation in two years' time at 0.95% (November forecast: 1.43%), based on market interest rates.
BoE policymakers vote 7-2 to raise bank rate to 4.0% (Poll: 4.0%)
BoE policymakers Tenreyro and Dhingra voted to keep rates on hold at 3.5%.
BoE sees recession with just under 1% peak-to trough fall in GDP over 5 quarters vs November forecast of around 3% fall over 8 quarters.
MPC continues to judge inflation risks "are skewed significantly to the upside".
- MPC Vote Hike Actual 7 (Forecast 7, Previous 7)
- MPC Vote Unchanged Actual 2 (Forecast 2, Previous 2)
- MPC Vote Cut Actual 0 (Forecast 0, Previous 0)
GBPUSD rose sharply after BoE decision and is approaching upper limit of the local descending channell.Source:xStation5
