BOE announces its latest monetary policy decision - 18 March 2021
- Prior 0.10%
- Bank rate votes 0-0-9 vs 0-0-9 expected
- Gilts purchases £875 billion
- Corporate bond purchases £20 billion
- Total asset program £895 billion (unchanged)
- Developments in global GDP growth have been a little stronger than anticipated
- Aggregate measure of UK financial conditions has been broadly unchanged since the February report
- Recent plans for the easing of restrictions may be consistent with a slightly stronger outlook for consumption growth in Q2 2021
- Outlook for the economy remains unusually uncertain
- If inflation outlook weakens, BOE stands ready to take necessary action
- Does not intend to tighten policy unless there is clear evidence of progress in achieving inflation goal sustainably
- Full statement
Overall, there wasn't much of a hawkish tilt in the report so as to what Bailey was hinting at on Monday here. The central bank acknowledged some positive developments since the February meeting but nothing to change their view otherwise.
The rest of the language on policy in the statement remains unchanged for the most part.
In particular, there's also no mention or acknowledgment of recent bond market developments being "consistent" with the central bank's view on the economy - something that Bailey did point out earlier in the week as highlighted above.
All in all, there is some positives to take away from the report on the language towards the economic outlook, but nothing to suggest that policy accommodation will be withdrawn any time soon or that the BOE will change course in the next few months.
Cable dropping off on the report here from 1.3950 levels earlier to 1.3940 but the moves are relatively mild, with the dollar also keeping firmer on higher yields.
