MNI: BOE: Leaves rates, QE stock unchanged, Two......>

MNI: BOE: Leaves rates, QE stock unchanged, Two For Increase QE

--Bank Rate unchanged at 0.75%, QE stock unchanged at combined stg645bn

--Bank Rate decision unanimously;

--Saunders, Haskel dissent, vote for increase of QE by stg100bn

--BOE sees GDP falling sharply in H1 2020 and inflation below 1%

--BOE expects rapid recovery 

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The BOE voted unanimously to leave the Bank Rate unchanged in the May meeting,

but voted by a majority of 7-2 to leave QE unchanged. Saunders and Haskel voted

for an increase in the stock of asset purchases by Stg100bn. The MPC noted the

negative impact of Covid-19 and constructed a plausible illustrative economic

scenario: They see GDP falling sharply in H1 2020, while inflation drops below

1% in the next months. The bank expects consumer activity to be down 30% while

business investment is 50% lower. But the MPC projects rapid recovery

conditional on easing of social distance measures and high monetary and fiscal

stimulus.