Here’s what the Bank of England did to interest rates on Thursday – what’s next?


The UK central bank kept its key rate stable at 0.1% and its bond buying target unchanged at £ 745 billion on Thursday, but warned that the UK economy would not recover to its 2019 level until the end of 2021. the clearest signal to date that it no longer considers negative rates to be taboo.
The pound rose on the news, up 0.4% against the euro GBPEUR,
+ 0,23%
and 0.3% against the GBPUSD,
+ 0,38%
in London mid-day trading

The Bank of England’s short-term outlook for the UK economy, however, is less gloomy than it was three months ago, with year-end unemployment of 7.5% of the population ( against 10% previously).
Inflation currently stands at 0.6% per year but could drop to 0.25% in the latter part of the year, the BoE said, warning that it could take another two years before finally reaching its peak. official annual target of 2%.

The bank said it was still reviewing its rate policy, but negative rates were among the options being considered. It “will continue to examine the desirability of a negative policy rate as a policy tool alongside its larger toolbox,” he said.
So what are the prospects?
Decisions on rates and quantitative easing were unanimous in the nine-member monetary policy committee. But tough choices lie ahead, when the Bank must decide how to contribute to the stimulus the UK economy will need when, in January, it is hit by another major shock – Brexit.


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