BOE cuts bank rate by 25 bps to 4.75%, as expected | Forexlive
- Prior 5.00%
- Bank rate vote 8-1 vs 7-2 expected (Mann dissented to keep bank rate at 5.00%)
- There has been continued progress in disinflation
- But domestic inflationary pressures are resolving more slowly
- Most of the remaining persistence in inflation may dissipate quickly
- This as pay and price-setting dynamics continue to normalise following the unwinding of the global shocks
- The combined effects of the measures announced in Autumn Budget 2024 are provisionally expected to boost the level of GDP by around 0.75% at their peak in a year’s time
- There remains significant uncertainty around the outlook for the labour market
- Data are difficult to interpret and wage growth has been more elevated than usual relationships would predict
- A gradual approach to removing policy restraint remains appropriate
- Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further
- To monitor closely the risks of inflation persistence and will decide the appropriate degree of monetary policy restrictiveness at each meeting
- Full statement
This article was written by Justin Low at www.forexlive.com.
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