BOE raises bank rate by 25 bps from 0.75% to 1.00%, as expected

• Prior 0.75%
• Bank rate vote 6-3 vs 8-1 expected (Haskel, Mann, Saunders voted to raise bank rate 50 bps to 1.25%)

• Some degree of further tightening in monetary may still be appropriate in the coming months
• Two MPC members judged rate guidance as inappropriate considering risks to growth, inflation are more balanced
• Will consider starting process of selling UK government bonds now that bank rate is at 1%
• BOE forecasts UK economy will slide into recession
• Expects further slowdown in the UK economy, inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term to rise by 10% this year
• Full statement
• Full summary

Even though the policy move and subtle change to the rate guidance on rates may appear more hawkish at first glance, the BOE is painting a rather dire picture of the economy moving forward. The central bank sees the UK economy contracting in 2023 as stagflation risks as well as the cost-of-living crisis weighs on overall activity.

I reckon that is in part causing a drag on the pound as they also kick the can down the road in terms of trimming the balance sheet. The forecasts by the BOE: