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Bank of England stands pat on interest rates

Bank of England stands pat on interest rates

The Bank of England (BoE) nine-member monetary policy committee have voted unanimously to keep interest rates at the current levels of 0.75 percent, matching market expectations.

The central bank also kept its asset purchase program unchanged at £435 billion after the approval of all members of the MPC.

The BOE's monetary policy committee said in its accompanying statement that it aims to reach the inflation goal of 2 percent, and in doing so will support growth and job creation.

The Bank's latest economic forecasts, announced in the inflation report in May, suggested slight adjustments to the possible outcome of Britain's exit from the European Union, with a requirement for interest rates to rise to 1 percent by the end of the forecast period.

According to these forecasts, GDP growth was slightly below its potential in 2019 as a whole, reflecting a slowdown in global growth and continuing uncertainty in Britain's exit from the EU.

Domestic inflationary pressures increased, so that CPI inflation rose above the 2 percent target within two years and was still rising at the end of the three-year forecast period.

For the second quarter of this year, the Bank of England lowered its economic growth forecast to zero from 0.2%, amid Brexit concerns and the escalating global trade tensions.

Inflation fell to the bank's target of 2 percent in the year ended May from 2.1 percent in April, and wage growth accelerated at its fastest pace in a decade.

The Bank of England continues to hold on to the idea of ??raising interest rates to curb inflationary pressures, while bank member Michael Saunders said uncertainty about the Brexit does not affect the delay in the BOE's tightening policy.

The British pound rose for the third consecutive day against the greenback, as the BOE held onto its expectations of higher interest rates, while the Federal Reserve meeting yesterday showed the bank's readiness to cut interest rate if needed.

The GBPUSD pair rose today and hit a one-week high of 1.2727, while currently trading at 1.2698 after opening at 1.2639. 

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