DG: BoE keeps rates unchanged by 8-1 vote, as expected
The Monetary Policy Comittee voted by eight to one to keep Bank Rate at 0.5% and was unanimous in its decision to hold the size of the Bank of England´s asset purchase facility at £375bn, as expected.
Ahead of Thursday´s decision there had been speculation in markets that either Martin Weale or Kristin Forbes might have joined Ian McCafferty in calling for an immediate interest rate hike.
In its post-meeting statement the MPC highlighted that about four fifths of the difference between the latest reading for the consumer price index, at -0.1% year-on-year, and its target of 2% was the result of falls in energy, food and other imported prices.
Domestic cost pressures were subdued and the outlook for growth had weakened since the August Inflation Report. Indeed, "there remained downside risks to this outlook, including that of a more abrupt slowdown in emerging economies," the BoE said.
Nonetheless, domestic momentum remained "resilient".
The above was despite the fact that markets were now discounting an even more gradual pace of tightening at the time of the last IR.
McCafferty was the lone dissenter from the MPC´s decision, having voted for a 25 basis point increase in Bank Rate.
