BOE hikes bank rate by 0.25% to 0.5%

BOE now out with their eagerly awaited decision 2 Nov

  • bank rate 0.5% vs 0.25% prev
  • QE unch at £435bln
  • corp bond target at 10bln
  • Vote: 7-2

BOE minutes and inflation report also out here

Bias: Neutral
Growth Forecast: Stronger near-term / weaker further out
Inflation Forecast: Higher near-term / back toward 2% further out
Brexit: Focused on smooth transition
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— 7-2 to raise rates 25bps to 0.50%
— Cunliffe and Ramsden voted to keep rates on hold
— 9-0 for unchanged QE at GBP435B; Corporate bond-buys GBP10B
— Two more hikes seen over forecast horizon, to bring inflation back to target
— MPC see inflation peaking in October 2017 at just over 3%
— Growth seen averaging 0.4% per quarter over the forecast horizon
— Outlook for inflation and activity broadly similar to August
— Business investment continues to grow but hurt by Brexit uncertainty in real terms
— Remains considerable risks to the outlook, due to Brexit developments

GBPUSD falling as inflation outlook and minutes show dovish tones still
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