The Bank of England Monetary Policy Committee voted to keep interest rates on hold at 0.10% yesterday, as expected, and raise quantitative easing (QE) by £100bn, as expected.
Although the MPC has been described as “flirting” with the idea of bringing in negative interest rates over the next year, the governor Andrew Bailey said the economy is recovering faster than expected and all 9 members voted to keep rates on hold.
The Bank is now predicting a contraction in the economy of 20% in the first half of 2020, compared to earlier warnings of a 27% fall. Unemployment remains the biggest worry, and further QE is widely expected later in the year in an effort to stimulate spending.
Sterling drifted lower during the course of the day, ending around 1% lower against both the euro and US dollar.
Today we will see retail sales data for May.
