- The Bank’s Monetary Policy Committee voted 7-2 to keep its benchmark interest rate unchanged at its historic low of 0.1%.
- Sterling fell sharply following the announcement.
- The Bank of England has been monitoring a confluence of crucial data points as inflation remains persistently high.
LONDON — The Bank of England held interest rates steady on Thursday, defying many investors’ expectations that it would become the first major central bank to hike rates following the coronavirus pandemic.
The Bank’s Monetary Policy Committee voted 7-2 to keep its benchmark interest rate unchanged at its historic low of 0.1%, and 6-3 in favor of continuing the existing program of U.K. government bond purchases at a target stock of £875 billion ($1.2 trillion). The MPC voted unanimously to maintain its £20 billion stock of corporate bond purchases, keeping the total asset purchase program at £895 billion.
Markets had been uncertain as to whether the Bank would set off on the path toward monetary policy normalization on Thursday or at its next meeting in mid-December, but analysts broadly agreed that a hike was due before the end of the year.
Sterling fell sharply following the announcement. It was last seen down by around 0.95% against the dollar at 1.3551, while the euro gained 0.4% on the pound.
The Bank of England has been monitoring a confluence of crucial data points as inflation remains persistently high while economic growth moderates and labor conditions tighten.
