Bank of England governor says UK ‘not out of the woods’ on inflation, after leaving interest rates on hold – as it happened
BoE votes to cut its stock of government bonds at a slower pace over the next year
Just 30 minutes until the Bank of England releases its decision on interest rates, and on how quickly it will unwind its crisis-era quantitative easing portfolio over the next year.
Victoria Scholar, head of investment at Interactive investor, sets the scene:
The Bank of England is expected to keep rates unchanged at 4% during its policy decision meeting today, particularly in light of yesterday's inflation data which matched analysts' expectations. Nonetheless inflation is running much hotter than the central bank would like and is expected to push higher in September before pulling back. Elevated inflation makes it harder for the central bank to continue on its monetary loosening path, raising the likelihood of a higher-for-longer interest rate environment which could have negative effects on borrowing and the housing market.
At its previous decision meeting, the Monetary Policy Committee (MPC) cut interest rates by 25 basis points to 4%, in a very narrow vote that divided the BoE's rate setters. This time, the monetary policy committee is expected to be much more united in its decision with a wider vote split in favour of a hold.
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