06.08.202006:35:00UTC+00BoE Unanimous On Rate; QE

Policymakers of the Bank of England unanimously decided to retain the interest rate at a record low and quantitative easing.

The nine-member Monetary Policy Committee voted to hold the interest rate at 0.10 percent, as widely expected. The bank had altogether reduced the rate by 65 basis points at two unscheduled meetings in March.

The bank retained the size of the asset purchase programme at GBP 745 billion.

In the monetary policy report, the bank said jobs and incomes will be lower than they were before Covid-19 for some time.

All members judged that the existing stance of monetary policy was appropriate.

GDP is expected to have been over 20 percent lower in the second quarter of 2020 than in the fourth quarter of 2019. GDP is projected to exceed its level in the fourth quarter of 2019 until the end of 2021.

Employment has fallen since the Covid-19 outbreak. In the near term, the unemployment rate is projected to rise materially, to around 7.5 percent by the end of the year.

Consumer price inflation is forecast to fall further below the 2 percent target and average around 0.25 percent in the latter part of the year, largely reflecting the direct and indirect effects of Covid-19.

In two years' time, inflation is forecast to be around 2 percent.