The BoE left rates and QE unchanged as widely expected, an in a unanimous vote. In the Quarterly Inflation Report, the Bank has made changes to inflation and growth forecasts, raising the former and lowering the latter.
The fact that the Brexit uncertainty has risen noticeably means short-term GDP forecasts have been cut. The BoE’s projections do not include a no-deal Brexit possibility and it continues to assume a smooth Brexit scenario. If so, rate rises will be gradual and limited, according to the Bank. However, even if it is a no-deal Brexit, it does not necessarily mean rates will automatically be cut. The BoE’s response to whatever form Brexit takes will not be automatic, it says, and rates could go in either direction.
So, it was more or less a repeat of the statement in June, with minor changes. The pound has barely responded as a result. It may turn more volatile if the BoE’s Mark Carney says anything significant in his press conference, which is set to get underway in a few minutes.