Thursday 30th January 2020 - 12:05 (GMT)
The Bank of England has voted 7-2 in favour of holding UK interest rates at 0.75% during what was also Mark Carney’s final policy vote as Governor of the Bank of England. The pound immediately rallied following the news and has found some level of support above $1.30 versus the US dollar and €1.18 versus the euro.
The move comes as optimism amongst UK manufacturers rose at the fastest pace ever over Q4 2019, UK employment also remains high at over 70% and house price data continue to outperform market expectations. With this, the Bank of England has decided to keep the interest rate lever at hand for when the UK economy may need it most.
Subdued spending data earlier this month had help fuel rate cut speculation ahead of todays vote. Figures from the CBI indicated flat retail sales over late December as households remain cautious about their finances amidst a backdrop of Brexit uncertainty. The UK will officially leave the European Union tomorrow at 11pm and enter a period of transition to strike new trade deals outside of the EU.
As Mark Carney steps down after six years at the helm of the BoE, all future decisions will now be guided by Andrew Bailey, currently chief executive of Britain’s Financial Conduct Authority, who takes up his role on March 16th of this year.
