The BoE left the repo rate unchanged at 0.10% and the QE total unaltered, as had been widely anticipated. The repo rate decision was by unanimous vote at the nine member Monetary Policy Committee, while the vote on the QE was by 8-1. The dissenting voter was Haldane, who is leaving the MPC, and who wanted to lower the size of the quantitative easing program.
The BoE still affirmed that the rate of QE purchases would slow down, as previously signalled, which the Bank stressed was purely an operational decision that “should not be interpreted as a change in the stance of monetary policy.” In the quarterly Monetary Policy Review, the BoE raised both growth and inflation projections.
GDP is now expected at 7.25% in 2021 before moderating to 5.75% growth in 2022. CPI is now forecast rising to a y/y rate of 2.31% at the one-year horizon, up from the 2.07% y/y rate that was forecast in the February MPR.