Bank of England holds rates amid stronger growth and inflationary outlook

QE held at current pace but BoE signals tapering

The Bank of England’s Monetary Policy Committee has voted unanimously to hold its key interest rate at 0.1%, with the central bank now forecasting a stronger outlook for GDP growth and inflation.

GDP growth is now expected to reach 7.3% in 2021, while the inflation rate expected to jump from 0.7% closer to the bank's 2% target in Q2 and Q3, according to the May MPC report. The bank also voted unanimously to maintain its stock of sterling non-financial investment grade corporate bond purchases at £20bn, while MPC member Andy Haldane was the sole opponent to maintaining the target for government bond purchases at £875bn. Haldane's preference was to continue with the existing programme of UK government bond purchases but to reduce the target for the stock of these purchases from ...