Summary:

• 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 as the BoE has pushed back a first interest rate hike to Q3 2018. Source: xStation5

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.