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February 07, 2019BANK OF ENGLAND MONETARY POLICY The Bank of England's Monetary Policy Committee (MPC) voted to maintain the Bank Rate at 0.75 per cent. The MPC also voted to maintain the stock of UK non-financial corporate bonds stock at £10 billion and the stock of UK government bond purchases at £435 billion. The economic outlook depends significantly on the new trading arrangements between European Union and the United Kingdom with the Bank of England noting that the appropriate path of monetary policy will depend on economy adjustment to these events.
The world economy has continued to slow in recent months with a broad-based softening across regions that reflects tightening global financial conditions and trade tensions. Global growth is expected to be below trend in coming quarters and weigh on UK net trade. Economic activity is projected to be supported by more accommodative monetary policies in all major economic areas. The MPC projects annual GDP growth to be 1.2 per cent in 2019, 1.5 per cent in 2020 and 1.9 per cent in 2021.
CPI inflation fell to 2.1 per cent in December and is expected to decline below the 2 per cent target in the short-term due to falling gasoline prices. A weaker near-term outlook is likely to create small margin of slack in 2019, but afterwards demand growth will exceed the subdued pace of supply growth and build pressure. The expectations. Under current assumptions, inflation will be slightly above target at the end of the forecast horizon.
Bank of England
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