To no-one’s real surprise, on May 2 the Bank of England’s (BoE) Monetary Policy Committee (MPC) voted unanimously to keep its Bank Rate on hold at 0.75 per cent.
Amid the prolonged uncertainty imposed by the latest Brexit deadline extension, now to October 31, this was in line with the markets’ expectations.
Despite stronger than expected growth in the first quarter, the MPC remains cautious and is waiting until the Brexit outcome is clearer before raising rates.
It however emphasized that markets should expect a rate rise above 0.75 per cent in the next year or so, as this would be necessary to return inflation to the 2% target at that point.
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