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James Smith, developed markets economist at ING, notes that the Bank of England has unanimously voted to keep rates on hold and the policymakers have made a few positive tweaks to growth throughout their forecast period, though this is mainly due to more dramatic inventory-building during the first quarter, as well as the flatter yield curve.

Key Quotes

“Importantly though, the Bank continues to look for sluggish growth over the next few quarters. That’s partly down to a reversal of the Brexit stockbuilding effect, but like us, policymakers expect investment to continue to fall.”

“As ever though, wage growth remains a key focus for the Bank of England and this has been a stand out positive in the UK economy over the past year or so. Admittedly, some measures of hiring activity have dipped recently, perhaps indicating weakness ahead. For the time being though, the Bank continues to expect wage growth to edge closer to the 3.5-4% year-on-year level over the forecast period.”

“For the committee as a whole though, we suspect Brexit uncertainty will remain front-and-centre. Barring a deal being ratified by the UK much earlier than expected, we think it’s unlikely the BoE will hike rates this year.”