• Prior 1.00%
  • Bank rate vote 9-0* vs 9-0 expected (*Haskel, Mann, Saunders voted for a 50 bps rate hike instead)
  • CPI inflation is expected to be over 9% during the next few months
  • CPI inflation to rise to slightly above 11% in October
  • BOE will take the actions necessary to return inflation to the 2% target sustainably in the medium-term
  • The scale, pace and timing of any further rate hikes will reflect the assessment of the economic outlook and inflationary pressures
  • BOE will be particularly alert to indications of more persistent inflationary pressures
  • BOE will act forcefully in response, if necessary
  • Full statement

The pound has fallen on the decision with cable slipping from 1.2150 to 1.2060 as the BOE delivered a rather straightforward decision. As mentioned earlier here, the risks either way are likely to point towards the downside for the pound.

The central bank is sticking with a more gradual approach in line with economic considerations but it won't do much to alleviate the narrative that inflation is set to hit double-digits in the UK and that the cost-of-living crisis is set to worsen in the months ahead.