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The Bank of England maintained interest rates at 4.5 %, while this year it left the door for further reduction because it is facing global trade in the UK and ongoing price pressure.
For the Central Bank's monetary policy, the Committee voted eight to one to leave its benchmark rate unchanged because it repeated the plans to continue the “gradual and careful” approach to further cuts.
SWATI DHINGRA, an external MPC member and a long-time dove, voted to reduce a quarter-point rates.
“There are a lot of economic uncertainty at the moment,” said Andrew Bailey, Governor Boe. He added that while the bank held 4.5 %rates, “we still think interest rates are on a gradually declining path”.
The Boe In the coming months, the act is facing a delicate balance because it measures evidence of a flat economy and weakens the markets market against the prospects of picking up inflation.
Entries within this week of the meeting will open up the possibility of lowering the rate when MPC manages the next in May, but did not give a strong signal of the probability of pulling.
“There was no assumption that monetary policy was on a pre -set road over the next few meetings,” the records said. MPC added that it was focused not only on whether growing global and domestic uncertainty would weigh for demand, but also if British wages and price pressures could show more permanent than expected.
Thursday's decision followed last month, when Boe also reduced a quarter-point reduction, when the growth estimate was also reduced to 0.75 percent.
“We look very much at how global and domestic economies are developing on each of our six weeks of assembly meetings,” Bailey said. “Whatever it happens, it is our work to ensure that inflation remains low and stable.”
The bank thinks that consumer prices inflation will speed up to 3.75 % at the end of this year compared to 3 % in January – significantly above its 2 % goal.
However, the BOE agents' survey showed on Thursday that more companies report that they freeze hiring, and potentially prepare to reduce jobs if it is unable to pick up growth in the UK.
“The Bank of England is stuck between a rock and a hard place with inflationary pressures growing together with a slight view of growth,” said Zara Nokes, a global market analyst JPMORGAN Asset Management.
The comparison of uncertainties is a sign of growing economic damage by US President Donald Trump and the prospect of cutting the spending in the next week of the spring statement by Chancellor Rachel Reeves.
Pooja Kumra, a strategist rate at TD Securities, said that Reeves statement is a significant risk. “Other cuts of expenditure from the government.” [suggest] A picture of growth in the UK, ”Kumra said.
The MPC is afraid that the job market is getting worse, but also has become a more pessimistic about the degree at which the British economy can grow without raising price pressures.
The numbers published earlier on Thursday showed Wage growth remains strongFor 5.9 % of the annual rate in three months until January, with the exception of bonuses.
However, the BOE agents survey emphasized the weakening of trends in the labor market.
“Employment intentions have changed negatively since the last round, with more companies stating that they stop or freeze and say that they can look at the outlook,” the agents report.
The probability of reduced interest rates in May dropped slightly below 50 percent, from approximately 60 percent earlier per day, depending on the levels of the swaps market. The traders continued to expect two cuts by the end of the year.
Catherine Mann, an external MPC member, who voted in February to reduce half, has fallen with most of the committee and decided to maintain rates unchanged to 4.5 %.
Two -year -old gilded yields sensitive to the rate increased slightly to 4.17 %, from a minimum of 4.15 % earlier during the day.
The pound was $ 1.296 after the decision, which is 0.3 % on the day.
