Bank of England leaves key interest rate unchanged

From The Washington Post:


Britain’s central bank said it planned to provide fresh stimulus next month but took no new actions on Thursday, defying expectations that it would move swiftly to buffer the island nation’s economy following its historic decision to leave the European Union.

Bank of England (BoE) Gov. Mark Carney has repeatedly signaled that the central bank would loosen its rein on the economy this summer. He has warned that Britain’s prospects for growth have deteriorated since the public referendum last month to exit — or Brexit — the E.U. Investors had widely anticipated that meant the central bank was prepared to cut its benchmark interest rate Thursday from 0.5 percent to 0.25 percent.

But in a statement, the BoE highlighted the strength of the nation’s financial system despite initial turmoil after the vote. And though there are early signs that the economy is weakening, the central bank said it wants time to consider more data.

“Markets have functioned well, and the improved resilience of the core of the U.K. financial system and the flexibility of the regulatory framework have allowed the impact of the referendum result to be dampened rather than amplified,” the statement said.

BoE officials voted 8-1 to leave interest rates unchanged on Wednesday, with one dissent in favor of cutting rates immediately. The bank will release an updated economic forecast in three weeks, and most officials expect it will announce stimulus measures then.

“The committee discussed various easing options and combinations thereof,” the statement said. “The exact extent of any additional stimulus measures will be based on the Committee’s updated forecast, and their composition will take account of any interactions with the financial system.”

London’s FTSE 100 dropped on the news, giving up morning gains and closing down a quarter …

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