A recap on the Bank of England MPC announcement from Goldman Sachs

(bolding mine for emphasis)

  • The BoE's MPC voted 6-2 to leave Bank Rate unchanged at 0.25% at its August policy meeting. In a dovish tilt relative to our expectations, Chief Economist Haldane did not join two MPC members who had voted for a rate hike at the June meeting.
  • The Committee announced that its Term Funding Scheme (TFS, offering cheap, 4-year funding to banks and introduced last August) will end in February 2018, as we expected.
  • No major changes were announced to the BoE's stock of purchased assets.
  • The MPC's updated macro assessment involved a modest downgrade to GDP growth, with the inflation forecast broadly unchanged from May, conditional on a somewhat steeper money market curve. Weaker GDP growth partly reflects a weaker supply-side performance (with weaker productivity growth), which translates into weaker wage growth and adds to the squeeze in households' real incomes.
  • As expected, there were few changes to the tone of the Monetary Policy Summary. Governor Carney sought to maintain a data dependent message on the future path of policy in his Press Conference. This included continuity with the main elements of his June speeches given at Mansion House and at Sintra. The Governor refused to be drawn on the timing of any prospective rate rise and reiterated the Committee's message that "if the economy follows a path broadly consistent with the August central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the path implied by the yield curve underlying the August projections."
  • Today's BoE communication contained few surprises relative to our base case. Overall, there was a little more emphasis on impaired supply capacity than we expected. We therefore maintain our current forecast for a rise in Bank Rate in 2018Q4. We have argued that the BoE would start withdrawing its credit easing policies, including by ending the TFS as the BoE confirmed.

On the Bank of England earlier:

And, as it happened: