After the regular meeting held on Thursday, the Bank of England, in particular, its Monetary Policy Committee, has reportedly decided to leave the interest rate at 0.75%, which in fact agrees with the market players' forecast.
It did not take much effort to foresee this move of the UK Central Bank, especially given the most recent inflation data for December 2018 with a recorded slowdown to 2.1% (2.3% earlier). As a result, the upward rate revision actually makes no sense when the inflation is sliding. The next week will be marked by the January inflation figures, and it is quite possible that they might show no changes month-on-month, staying at 2.1%.
The BOE has not changed the asset buying either. As the meeting minutes read, the decision not to change the interest rate was carried by acclamation. This means that the chance for an increase in the interest rate in case of steady inflation rate is very small.
The BOE's decision has fueled the decline of the sterling against the US dollar. The rate dropped by some 0.3%. However, the sterling has somewhat restored positions by now reaching some $1.2974.
It should be mentioned that the Central Bank stated that it is ready to resume monetary tightening in case of the smooth divorce process. The UK departure from the EU is slated for March 29.
For now, the UK can record the slowest economic growth over the past 10 years in 2019. At the same time, the regulator hinted that the interest rate revision can be faster expressing expectations the inflation at 2.1% in two years, which will be above the target level of 2%.