At the end of today’s session of the monetary policy Committee of the Bank of England decided to keep its key interest rate at a record low 0.25%.
This time, against the common decision voted only two, not three, members of the Committee, proposing to raise the rate to 0.50%. Reducing the number of “opposition” was due to the retirement from the Committee, Kristin Forbes, which called for tightening of monetary policy.
Despite the fact that the Committee’s decision coincided with the forecast of analysts, the pair GBP/USD in a few minutes fell by almost 100 pips, reaching 1.3140 in comparison with the level of 1.3240, recorded before the publication of the results of the meeting.
One of the reasons for the pound’s weakness was the deterioration of the forecast of the Bank of England to increase UK GDP to 1.7% from 1.9% in 2017 and up to 1.6% from 1.7% in 2018. However, the inflation forecast for 2018 was raised to 2.5% from 2.4%.
During the accompanying press conference, the head of the Bank of England mark Carney said that in the next three years may need a “slight tightening” of monetary policy.