BoE: Hoping for stability - BNPP

Dominic Bryant, Senior European Economist at BNP Paribas, explains that as expected by most, the Bank of England (BoE) left policy unchanged with a 6-2 vote in favour of stable rates and an 8-0 vote on maintaining the current size of the balance sheet, thereby hoping for economic stability.

Key Quotes

“The Bank revised down marginally its growth forecasts, but left its inflation projections largely unaltered. It therefore expects inflation to remain above target until at least 2020.”

“The inflation forecast is consistent with the MPC’s view that rates could rise by more than the market is pricing in over the forecast horizon.”

“In the near term, however, we expect growth to underperform the Bank’s forecasts, meaning policy remains on hold until late 2018.”