Chris J Ratcliffe
The Bank of England took no action Thursday, holding its benchmark rate at 5.25% for the third-straight meeting.
The Monetary Policy Committee voted 6-3 to hold rates, with three members still voting for a hike. The market was expecting another vote for not action.
The MPC said policy needs to be restrictive for an “extended period.”
Pound sterling (NYSEARCA:FXB) (GBP:USD) extended its gain against the U.S. dollar, moving above $1.27.
“CPI inflation is expected to remain near to its current rate around the turn of the year,” the MPC said in a statement. “In particular, services price inflation is projected to increase temporarily in January, related to base effects from unusually weak price movements at the start of this year, before starting to fall back gradually thereafter. The near-term path for CPI inflation is somewhat lower than projected in the November Report, in part reflecting recent declines in energy prices.”
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