(BOE) The Bank of England voted unanimously to keep the bank rates unchanged at 0.1%, expecting inflation to rise further in the near term.
The BOE Committee voted to continue with the existing bond purchases of 875 billion pounds, financed by the issuance of the central bank reserves of 20 billion pounds.
Following elevated cost prices at the domestic and global level, BOE expects inflation to rise to 4% in the fourth quarter, more than MPC’s 2% rate and 0.8% above the May projection.
BOE is still confident that the uptick in inflation is transitionary and expects it to get close to the 2% target when demand and supply balance.
The BOE committee is confident that the UK will show that GDP grew by 5% in the second quarter, which is 4% below the pre-pandemic level and slightly above May’s projection.
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