Bank of England announces its monetary policy decision for June 2018
- Bank rate 0.50%
- Official bank rate votes 6-3-0 vs 7-2-0 expected
- Asset purchase target £435 bn
Here's the statement details:
- Haldane joins McCafferty and Saunders to dissent
- MPC members backing rate rise see upside risks to wages and unit labour costs
- Estimates Q2 to grow by 0.4%
- Household spending and sentiment have bounced back strongly
- Inflation expected to pick up slightly more than expected in near-term
- All members agree future rate increases are likely to be gradual, limited
- Any reduction in QE asset holdings will be conducted at a "gradual, predictable pace"
- All members more confident now that Q1 slowdown is temporary
- Ongoing policy tightening will be appropriate
- Majority saw value in seeing how data evolves from here
- BOE won't consider reducing QE stock until rate hits 1.5%, previously at 2%
Haldane joining in on the vote count is the real kick here, and it pushes expectations of an August rate hike higher. GBP/USD jumps to session highs of 1.3204 now from near session lows of 1.3110 earlier.
The more upbeat tone on household spending and the change to the QE reduction target is also a plus for hawks. But ultimately, it will still come down to the data points but in the short-term this is much needed relief for sterling bulls.
