BoE Policymakers Unanimous On Holding Rate; QE

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Policymakers of the Bank of England unanimously decided to retain the record low UK interest rate and quantitative easing amid uncertainty over the post-Brexit trade deal.

The nine-member monetary policy committee voted to hold the interest rate at 0.10 percent and the quantitative easing at GBP 895 billion, as widely expected, on Thursday.

At the November meeting, the bank had raised the size of the asset purchase programme by GBP 150 billion to the current level.

The successful trialling of some Covid vaccines and initial plans to roll them out widely over the first half of next year is likely to reduce the downside risks to the economic outlook than previously assessed.

The additional fiscal measures in Spending Review 2020 are likely to boost GDP by an estimated peak of over 1 percent during 2021-22, the bank said.

Although inflation eased to 0.3 percent in November, it is expected to rise quite sharply towards the target in the spring, as the VAT cut comes to an end and the large fall in energy prices earlier this year drops out of the annual comparison.

If the outlook for inflation weakens, the MPC said it stands ready to take whatever additional action is necessary to achieve its remit.

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