Here comes the Bank of England ...


Carney and Prince Charles

Reuters/Kirsty Wigglesworth

LONDON - The Bank of England is about to deliver its latest monetary policy decisions, following the December meeting of its Monetary Policy Committee.

The bank is widely expected to leave its key interest rate unchanged at 0.25%, a record low that has been in place since rates were cut in August following the UK's vote to leave the European Union.

Forecasts from economists suggest that the MPC will vote 9-0 in favour of leaving rates unchanged, as well as leaving the bank's quantitative easing programme unchanged at a maximum of £435 billion - a combination of the £375 billion of QE completed before August, and the £60 billion announced post-Brexit vote.


Anything other than a unanimous vote to leave rates unchanged would be a surprise, and focus will instead be on the minutes of the MPC's meeting.

At its November meeting, the BoE moved away from a bias to more easing (in the form of further rate cuts and QE) and towards a neutral stance, meaning that rates could go either way. That was as a result of better than expected economic data coming out of the UK since the Brexit vote.

"Monetary policy can respond, in either direction, to changes to the economic outlook as they unfold to ensure a sustainable return of inflation to target," Governor Mark Carney said in a press conference after November's decision.


Any clues from the minutes about which way the bank is looking, as well as how the bank sees inflation progressing in the coming months following the huge drop in the value of the pound since the EU referendum.

The bank has repeatedly said it is willing to allow inflation to run higher than the central bank's 2% target in order to help employment and allow Britain's economy to grow.

This post will be updated once the Bank of England's decision is announced.


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