BoE faces 'tough balancing act' as UK growth forecasts upgraded

Kept rates on hold

The Bank of England's Monetary Policy Committee (MPC) has voted unanimously to hold interest rates at 0.25% today, while UK growth expectations for 2017 have been upgraded to 2% from 1.4% on the government's fiscal stimulus plans and "firmer global momentum".

Sterling fell 0.6% to $1.2590 following the announcement as the Bank seemed in no rush to raise interest rates, despite raising its forecasts for UK economic growth for the next few years in response to developments at home and abroad. Growth expectations were increased to 2% in 2017, from 1.5% to 1.6% for 2018 and from 1.6% to 1.7% in 2019. The minutes of the meeting on 1-2 February said: "The upgraded outlook over the forecast period reflects the fiscal stimulus announced in the Chancellor's Autumn Statement, firmer momentum in global activity, higher global equity prices and more s...