The Bank of England has cut its growth estimate for 2017, reducing the forecast from +1,9 to +1,7 per cent. Also for 2018 the expectations of the British Monetary Authority are reduced, with the GDP revised downwards to +1,6% from the previous forecast of +1,7%.
This is Mps Capital Services' assessment: “In today's meeting, the BoE kept rates unchanged at 0,25% with a 6-2 decision (two votes in favor of an increase).
Inflation estimates have remained virtually unchanged compared to the previous ones, but growth estimates have been revised downwards (1,6% from 1,7% in 2018). The new forecasts reflect a deterioration in the economic outlook compared to May, due to inflation rising faster than wages (revised slightly down).
It will continue with the reinvestments of assets for a total of 445 billion (including 10 billion of corporate).
Finally, due to the increase in consumer credit growth, the Central Bank unexpectedly decided not to extend the Term Funding Scheme, created to facilitate financing as part of the Brexit stimulus plan
The reaction on the market was a depreciation of the pound against both the dollar and the euro”.
