• Prior 5.25%
  • Bank rate vote 3-6 vs 3-6 expected (Greene, Haskel, Mann voted to raise by 25 bps)
  • Policy likely needs to be restrictive for extended period of time
  • Will continue to monitor closely inflation persistence and resilience in the economy as a whole
  • Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures
  • Estimates UK GDP flat for Q3 2023 (previously +0.1%)
  • Estimates UK GDP to be +0.1% in Q4 2023
  • Inflation well above target of 2% but expected to continue to fall sharply
  • Market participants had reported an increasing conviction that UK policy rates would remain ‘higher-for-longer’
  • Some business surveys are pointing to a fall in GDP in Q4 2023
  • But more forward-looking indicators were less pessimistic about growth prospects
  • Full statement

The pound is up slightly as the BOE does increase its inflation outlook by the very slightest while brushing aside risks to the economy for now (even if their GDP forecasts show added struggle in the economy). Besides that, the continued votes by 3 policymakers in favour of rate hikes does provide some transparency that there is evidence for further tightening. In other words, the hope for another 25 bps rate hike is perhaps still alive. Or at least the door is not shut completely.

Other than that, I don't see much else to really scrutinise on their decision. They said that it is "much too early" to think about rate cuts, so all in all it looks like a hawkish hold just at the margin.