BOE: Leaves rates, QE stock unchanged in unanimous...>

BOE: Leaves rates, QE stock unchanged in unanimous vote at July meet 

-Bank Rate unchanged at 0.75%, QE stock unchanged at combined stg445bn 

-BOE states inconsistency betw their projections and market asset prices 

-Monpol response to Brexit 'not automatic' could be 'either direction' 

-Sees inflation exceeding target within the next three years 

-Continues to assume smooth Brexit             

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The BOE voted unanimously to leave rates/QE unch, in line with market 

expectations. The MPC maintained the line that any policy decision on 

any Brexit outcome would not be an automatic one, and there were 

scenarious when rates could move in either direction. The MPC did not 

comment on the probability of a no-deal Brexit, but noted that an 

increase in the liklihood of a no-deal outcome can be observed in 

market prices. However, the MPC stated that its current projections are 

affected by an inconsistency between its assumption of a smooth Brexit 

and market asset prices on which its forecasts are based. The report 

further notes that in case of a smooth Brexit and some recovery in 

global growth, it would be appropriate to increase interest rates at a   

gradual pace and to a limited extent, subject to global growth firming.