- Bank of England leaves rates unchanged as expected
- First rate hike not seen until Q3 2018
- GBPUSD plunges following the statement
Below we present the most important headlines coming from the BoE’s statement:
- votes 6-2 to maintain rates unchanged
- forecasts based on 2 rate hikes over 3 years, first in Q3 2018
- reiterates rate hikes expected to be limited and gradual
- domestic uncertainty to weigh on UK investment
- CPI forecasts broadly unchanged, seen at 2.2% in 3 years
- BOE cuts economic growth forecast, sees weaker wage inflation
The GBPUSD is plunging following the dovish statement as the BoE has pushed back its projection pertaining to a first rate hike to Q3 2018. Moreover, the Bank has decided to cut growth forecasts, whereas those regarding inflation have been remained broadly unchanged.
The more in-depth analysis of the statement as well as the Inflation Report will be made in the following post.