Bank of England holds key interest rate at 0.5%, cuts inflation and GDP outlooks
The Bank of England on Thursday left its key interest rate at 0.5%, meeting widely held expectations. The Monetary Policy Committee voted 7-2 to make no changes in policy, a decision that comes as inflation has slowed to a 2.5% rate but is still above the bank’s 2% target. “The MPC judges that the impact of the past depreciation of sterling on CPI inflation, while remaining significant, is likely to fade a little faster than previously thought,” the bank said in a statement. The bank cut its second-quarter inflation forecast to 2.4% and its GDP forecast to 1.4% in its Quarterly Inflation Report. The size of the bank’s asset purchase program was held at £435 billion ($591 billion) and the corporate-bond purchase program was left at £10 billion. The pound fell to $1.3529 from $1.3608 before the decision. Sterling late Wednesday traded at $1.3547.