BOE leaves bank rate unchanged at 5.25%, as expected

• Prior 5.25%
• Bank rate vote 7-0-2 vs 7-0-2 expected (Dhingra, Ramsden voted to cut by 25 bps)
• For some policymakers, decision today was “finely balanced”
• That is because higher-than-expected services inflation reflected factors that would not push up medium-term inflation
• Labour market continues to loosen but remains relatively tight by historical standards
• Key indicators of inflation persistence continue to moderate, but remain elevated
• Need to be sure inflation will stay low before cutting rates
• Monetary policy will need to remain restrictive for sufficiently long to return inflation to target
• BOE remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably
• Will continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole
• Full statement

This article was written by Justin Low at www.forexlive.com.