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Bank of England warns on economic outlook after keeping rates unchanged

by LLB Editor
17th Sep 20 2:08 pm

The Bank of England today said the economic recovery remained on track but warned th outlook was “unusually uncertain” after voting to keep its main interest rate unchanged at 0.1%.

Commenting on the Bank of England’s rate decision this lunchtime, ING Senior Rates Strategist Antoine Bouvet and Chief EMEA FX and IR Strategist Petr Krpata noted, “The Bank of England unanimously decided to keep the Bank Rate at 0.1% and the size of its asset purchase facility (APF) unchanged today.

“The absence of any dovish dissent in favour of an increase in the APF might have come as a surprise to some, but it is consistent with a committee that saw overall slightly less adverse economic developments than it expected in August. Risks, it noted, remain skewed to the downside.

“Among the positives, the committee noted stronger than expected consumption, and slightly higher inflation. However, the tone was prudent to say the least.

“The phasing out of the Coronavirus job retention scheme is posing a key risk to the job market, although the Bank did not see a case to alter its forecast that the unemployment rate would peak at 7.5% in either direction.”

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