The central bank also left unchanged the size of its asset purchase programme at £435 billion ($ 543 billion) and its corporate-bond purchase programme at £10 billion. All nine members of the rate-setting board voted to stand pat on policy.
This week, Britain’s consumer-price index leapt above 1% for the first time since October 2014. “Sterling’s effect on CPI inflation will ultimately prove temporary and fully offsetting it would require exerting further downward pressure on domestic costs, including wages, and would therefore involve lost output and higher unemployment,” the BOE said in a statement.
The pound fell to $ 1.2459 from $ 1.2483 just before the BOE’s policy decision was released. The pound has been under pressure Thursday, with the US dollar rising after the Federal Reserve on Wednesday raised interest rates and signaled it will continue raising rates in 2017.
This article was first published by MarketWatch