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Pound Falls Against Australian Dollar Owing to Poor UK Retail Sales

The Pound has fallen against the Australian Dollar at the end of the week after some very disappointing UK economic data.

UK Retail Sales showed a drop year on year for December to 0.9% from the expectation of 2.6%.

This highlights a real problem for the high street in what is typically one of its busiest periods of the year.

The Bank of England have already hinted that they may be gearing up to cut interest rates so with consumers not spending as much as expected could this give the central bank enough evidence to warrant a rate cut towards the end of this month?

Earlier in the week on Wednesday the UK also confirmed a fall in the inflation level. Typically if inflation is falling then a central bank will often look to cut rates to stimulate the economy. Therefore, could this be another factor in the Bank of England’s decision?

The Bank of England are due to meet on 30th January so if we see an interest rate cut happening this could cause movement for GBPAUD exchange rates.

Chinese problems cause issues for the Australian Dollar

In the meantime the Australian Dollar has also experienced its own problems. According to the recent data China’s economy has grown by just 6.1% last year which is its lowest growth on record in almost thirty years.

The US China trade wars appear to have moved forward but during last year it is clear that they had an impact on the Chinese economy.

Back in 1990 Chinese growth was 3.9% so even though the growth was measured at 6.1% it is still a lot stronger.

However, as far as the Australian Dollar is concerned as China is its largest trading partner any slowdown in the world’s second largest economy can have a negative impact on the value of the Australian Dollar.

By Tom Holian

Source: Pound Sterling Forecast

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Bank of England policymaker maintains interest rate cut view

Bank of England (BoE) policymaker Michael Saunders has said he is sticking to his view that interest rates should be cut because of weaknesses in the UK’s labour market and wider economy.

“It probably will be appropriate to maintain an expansionary monetary policy stance and possibly to cut rates further, in order to reduce risks of a sustained undershoot of the two per cent inflation target,” Saunders said in a speech on Wednesday morning.

“With limited monetary policy space, risk management considerations favour a relatively prompt and aggressive response to downside risks at present.”

Saunders was one of two of the BoE’s monetary policy committee’s (MPC) nine members who voted to cut interest rates late last year.

Since then, several other MPC members — including outgoing BoE governor Mark Carney — have suggested a rate cut may be necessary.

Saunders said that while some recent surveys had suggested Britain’s economy had improved, while others had worsened and remained sluggish.

“But, taken as a whole … business surveys are generally soft and consistent with little or no growth in the economy,” he said.

“My own view is that, even if the economy improves slightly from the recent pace, risks for the next year or two are on the side of a more protracted period of sluggish growth than the MPR (Monetary Policy Report) forecast,” Saunders added.

Sterling was 0.2 per cent down against the dollar in morning trading on Wednesday.

By Anna Menin

Source: City AM

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Pound drops as Bank of England signals rate cut

The value of sterling has dropped after a trio of officials on the Bank of England’s Monetary Policy Committee (MPC) indicated that UK interest rates are likely to be cut in the coming months.

Outgoing governor Mark Carney told FTAdviser’s sister publication the Financial Times last week (January 7) that the central bank could cut interest rates to support economic growth.

Data released this morning (13 January) by the Office for National Statistics showed UK economic activity contracted by 0.3 per cent in November, the month prior to the general election, to reach a year-on-year growth of 0.6 per cent.

This and the trio’s remarks have led to sterling falling 0.7 per cent this morning and more than 2 per cent since the start of the year.

Mr Carney warned in the next economic downturn there would be limits to how much politicians can rely on central banks to boost economic growth, as most of the tools, including rate cuts and quantitative easing, are already being deployed.

But he said with the UK base rate presently at 0.75 per cent there was some scope for the UK central bank to cut rates.

UK interest rates are presently higher than those of the Eurozone and Japan, where interest rates are negative.

Mr Carney leaves his role as governor in March to be replaced by Andrew Bailey, the current FCA chief executive.

Jonathan Haskel, another member of the MPC, which sets interest rates at the Bank of England, said in a speech to the Resolution Foundation at the end of December that current economic indicators pointed to the UK economy and inflation slowing.

He said: “The global economic outlook has weakened materially since 2018, turning gloomier and less supportive of UK growth.

“This was mainly the result of heightened uncertainty combined with a slower pace of recovery in the Euro Area and, in particular, the escalation of US-China trade tensions.”

He said in the immediate aftermath of the UK voting to leave the EU the fall in the value of sterling had created a sharp increase in inflation to above 3 per cent, much higher than the inflation rate in other countries.

At first the higher prices did not, Mr Haskel said, translate into slower economic growth, as people maintained their consumption by reducing the amount they saved.

But while the UK savings rate fell to less than 3 per cent at the time, the lowest level since 1963, it has since risen to 4.5 per cent, and more recently to 6.75 per cent in the final quarter of 2019. The long-term average is 8 per cent.

If individuals are saving more and consuming less this means demand in the economy is weaker and so economic growth falls while consumption is also falling, meaning the rate of inflation falls.

Cutting interest rates makes saving cash less attractive, and so may encourage more spending, boosting growth and pushing inflation upwards. The current UK inflation rate is forecast to be below target at 1.5 per cent.

The Bank of England’s remit is to achieve inflation of around 2 per cent a year, if it falls materially below that level, then cutting rates to push inflation upwards towards the target would be the expected course of action.

A third member of the committee, Gertjan Vlieghe said he would favour an interest rate cut if economic data does not improve quickly.

He told the Financial Times on the weekend (January 12) that he expects there to be a pick up in UK economic activity as a result of the greater level of certainty as a result of Conservative party general election victory, but if this doesn’t happen, then rates will need to be cut.

He said it will be obvious by the end of January whether this has happened or not.

By David Thorpe

Source: FT Adviser

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Bank of England rate cut story hots up for UK markets

Despite some dovish-sounding language from Bank of England officials over recent days, we think it’s still too early to be pencilling in rate cuts. We take a look at what all of this means for the pound and UK rates.

Don’t over-interpret Governor Carney’s comments

Amid a temporary lull in Brexit turbulence, the Bank of England story is once again drawing the attention of investors.

The pound slipped on Thursday after BoE Governor Mark Carney signalled the MPC was debating the merits of near-term easing. Another MPC member Silvana Tenreyro indicated on Friday that she could join the rate cut camp if uncertainty persists.

For now though, we don’t think the Bank’s position has shifted significantly.

The fact that policymakers are considering easing is not a new revelation, after all two MPC members voted for immediate rate cuts at the past couple of meetings.

Admittedly, the Governor’s comments were perhaps the most candid so far on the possible need for easing. But then again, he noted that the combination of better Brexit and trade war newsflow has seen some modest optimism creep back into the outlook.

Carney also used the speech to push back on the idea that the Bank is out of ammunition. His assertion that there is roughly 250 basis points of easing space available can perhaps be debated. In particular, we’d argue that forward guidance may not add much to this “armoury” when markets aren’t pricing imminent tightening.

But the implied message is that the Bank doesn’t need to be so worried about having to act pre-emptively.

The jobs market holds the key to any policy easing

All of this suggests the core BoE position is still to ‘wait-and-see’ and stay data-dependent. And at a time of fairly high volatility in the growth numbers, we think the Bank will be keeping a close eye on the jobs figures.

Hiring indicators deteriorated over the latter stages of 2019. Vacancies have fallen consistently, while MPC member Tenreyro pointed towards a slowdown in job-to-job flows – another typical sign of slack.

But since the election, the Bank’s own Decision Maker survey provides tentative evidence that Brexit has become less of a concern among firms. The latest Markit/REC employment also points to the first rise in permanent staff appointments in a year.

Of course the Brexit saga is far from over, and there are plenty of question marks surrounding the UK government’s ambition to agree a free-trade deal this year.

That suggests a rate cut can’t be completely ruled out. But for the time being, we think the Bank will hold off on easing, barring a more significant deterioration in the state of the jobs market.

GBP: How much is an independent BoE easing cycle worth?

In a world of low interest rates, it is no surprise to read analysis of rate differentials having lost their explanatory powers for exchange rates. That is why GBP volatility on the back of recent BoE policy comments has proved a breath of fresh air for the GBP market.

Below we highlight the relationship between US and UK interest rate differentials and GBP/USD. We choose to look at the differentials between the one-year OIS swap rates, priced one, two and three years’ forward. The 1Y1Y differential naturally is the first to react to any kind of change in relative BoE-Fed policy settings.

The chart shows a decent relationship between the differentials and GBP/USD before Brexit and immediately post Brexit, as investors assessed the economic damage Brexit would cause. From 2018 onwards, however, that relationship has dramatically broken down as the market played ping-pong with the notion of a ‘no deal’ Brexit.

Notably, those differentials have been stuck in incredibly tight ranges since last summer, as the market had already priced in the Fed easing cycle, and the BoE remained in a Brexit moratorium. An independent BoE easing cycle would seem unlikely, and is not our call right now, but if the UK jobs data dramatically disappoints – 1Y1Y GBP OIS rates could at most fall 50 basis points.

As noted above, the relationship between rate differentials is quite weak, but we estimate that a BoE-prompted 50 basis point widening in the 1Y1Y rate differential might knock 180 pips off cable. Were rate differentials to regain their pre-Brexit powers – e.g. returning to the relationship that existed in the first half of 2016 – then that 50bp widening in differentials on an independent BoE easing story would knock 720 pips off cable – according to our estimates.

GBP rates: How low would they go?

Starting at the front-end, one of the clear takeaways of Carney’s speech is the very limited appetite for negative interest rates. These comments are not a surprise but reinforce the view that the Effective Lower Bound (ELB) is located somewhere just over 0%. We put that figure around five basis points which would ensure that Sonia remains in positive territory (Sonia has traded on average four basis points below the BOE Bank Rate over the past five years).

Another tool that Carney highlighted, as mentioned above, is the use of forward guidance to more clearly signal the path of base rates over the years. This should help to peg forward interest rates to the ELB for as long as the BOE can be credibly expected to forecast economic conditions. In a context fraught with political uncertainty relating to Brexit and the future relationship with the European Union, this might not be very long. We nonetheless feel comfortable with the assumption that the expected path for base interest rates for the next two years can be effectively controlled by the BOE. This implies a ‘floor’ for 1F1Y Sonia swaps also being just above 0%, from 59bp currently). In reality, the likelihood of touching that level is reduced by the risk premia that is contained in forward swaps.

Having established that 1Y1Y Sonia swap rates could approach that level, the next pressing question is whether this level can be sustained. This brings us back to the question of the credibility of any commitment to keep interest rates at the ELB for an extended period of time. Whilst the risk of a near-term no deal Brexit has been averted, failure to agree a trade deal with the EU by the end of the year is a significant risk for the economy and for the currency. Markets might question the BOE’s ability to keep interest rates this low in the face of sterling weakness.

Rates differentials: not as much downside as dollar rates

The implication for rate differentials with the dollar is much greater scope for the Fed to ease via the path of policy rates channel. For comparison, USD 1F1Y OIS is currently around 1.3% and has traded as low as 0.15%. One can debate the relative likelihood of UK and US economies requiring monetary easing but, from the point of view of the rates differential, there is clearly more downside to dollar rates.

Going one step further, we would also argue that unlike the US, the UK is a small, open economy and the currency is free to reflect any deterioration in the economic outlook. To an extent, this precludes the need for BoE easing and would make, in investors’ minds, the Fed more likely to ease than the BoE faced with a comparable shock to the domestic economy. The dollar’s reserve status, and its attractiveness as a safe-haven could in theory produce the opposite effect on the US economy. In a global downturn, it may well be that dollar rates markets price more aggressive Fed easing in response to the tightening of financial conditions brought by dollar strength.

Source: think.ing

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Carney says BoE could cut interest rates if weakness persists

Bank of England Governor Mark Carney said on Thursday that the central bank could cut interest rates if it looks like weakness in the economy will persist.

His comments sent sterling to a near two-week low against the U.S. dollar as he outlined a debate on the Monetary Policy Committee about whether interest rates needed to be cut now.

Last month and in November, two of the nine policymakers on the BoE’s interest rate-setting committee voted to cut interest rates to 0.5% from 0.75%, though Carney himself backed keeping rates on hold.

Britain’s economy grew at its joint-weakest annual rate since 2012 late last year, and many indicators of the economy remain downbeat despite signs of optimism among businesses and consumers following Prime Minister Boris Johnson’s landslide election win last month.

While Carney also described reasons for optimism, investors honed in on the comments about a possible rate cut, which he linked directly to the current economic outlook — whereas previously he talked about cuts more as a contingency.

“With the relatively limited space to cut Bank Rate, if evidence builds that the weakness in activity could persist, risk management considerations would favour a relatively prompt response,” Carney said in a speech at a BoE event on inflation targeting.

Similar language was used in the most recent MPC minutes by Michael Saunders and Jonathan Haskel, who both voted for a rate cut.

Combining possible interest rate cuts and the prospect of more asset purchases, Carney said the BoE’s current armoury was the equivalent of cutting Bank Rate by 2.5 percentage points.

Money markets now price in a roughly 14% chance of a rate cut at the BoE’s Jan. 30 meeting, Carney’s last before he hands over the reins to Financial Conduct Authority chief executive Andrew Bailey, who takes over on March 16.

Markets price in a roughly 50% chance of a rate cut by the middle of the year.

“While this shouldn’t come as a huge surprise given that there has been a couple of MPC dissenters calling for lower rates at the past two policy meetings, it is the strongest hint yet for a rate cut in the not too distant future,” currency strategist David Cheetham of brokerage XTB said.

On asset purchases, Carney said there was room to “at least double” the BoE’s 60 billion pound stimulus package of August 2016, a sum that will increase further as more government bonds are issued over time.

Carney also gave reasons why the BoE might not cut interest rates, citing “tentative” signs that global growth was stabilising and ongoing tightness in Britain’s labour market.

He also said there were early indicators that there had been some reduction in business uncertainty since Johnson’s sweeping Dec. 12 election win.

The rest of his speech focused on possible changes to the BoE’s inflation targeting framework, which he said had served Britain well.

Carney said raising the inflation target, as advocated by some economists as a way to spur growth and escape from years of low interest rates, worked better in theory than in practice.

He also pushed back against those who think the BoE should use its quantitative easing stimulus to directly fund infrastructure or environmental spending.

“In my view, these should be resisted,” Carney said. “While carefully circumscribed independence is highly effective in delivering price and financial stability, it cannot deliver lasting prosperity and it cannot address broader societal challenges.”

Reporting by Andy Bruce

Source: UK Reuters

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Sterling rebounds on business surveys, weaker dollar

Sterling rebounded on Monday as investors who had sold the currency for safe havens after the United States killed Iran’s top military commander returned to the pound.

Analysts said an upward revision to a business survey supported the pound too while the focus for investors now shifts to a parliamentary debate on Brexit legislation on Tuesday.

“We’ve got some better than expected PMIs, but some of it (the move higher in sterling) has been sentiment-driven,” said Morten Lund, an analyst at Nordea. “It’s a bit surprising, but I think some of it is positioning.”

The Purchasing Managers Index survey for Britain’s services for December came in with a final reading of 50, better than the 49.1 reading forecast by economists polled by Reuters.

Optimism among companies has improved markedly since the Dec. 12 election, although the economy continues to stagnate, the PMI survey showed.

Investors have remained cautious about the pound since Prime Minister Boris Johnson’s Conservatives won a big majority in the vote. They worry about more political uncertainty down the road with Britain set to leave the European Union on Jan. 31 and the two sides then beginning negotiations on their future trading relationship.

RBC Capital Markets currency strategist Adam Cole noted that provisional January PMIs on Jan. 24 “will be more interesting as they will shed some light on the potential for a rebound in activity early in 2020 as political uncertainty cleared following the election.”

The UK parliament returns on Tuesday and will debate the Brexit bill, which includes a clause ruling out any extension of the transition period for trade talks beyond December 2020.

The pound rose 0.7% to as high as $1.3173 on Monday but remains below last week’s $1.32.

Sterling fell on Friday after the killing of Iranian general Qassem Soleimani in a U.S. drone strike at Baghdad airport, boosting demand for safe-haven currencies, including the dollar.

The pound gained 0.4% to 85 pence before settling at 85.105 pence. It remains some way off its more than three-year high of 82.78 pence per euro reached last month.

Some analysts think sterling is in for a drop.

Danske Bank analysts see the pound falling to around 87 pence per euro in three months because the Bank of England will soon cut interest rates by 25 basis points due to economic weakness.

“Our base case is that this happens in January, but since the BoE has hinted it may want a bit more post-election data to rely on, the cut may not come before the May meeting,” the analysts said in a note. They said investors were not pricing in more than a 50% probability of a cut by the end of 2020.

Reporting by Tommy Reggiori Wilkes

Source: UK Reuters

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Interest rates unlikely to rise in 2020, says ECB policymaker Robert Holzmann

A European Central Bank policymaker has said it is unlikely interest rates will be lifted back into positive territory next year.

Robert Holzmann cited Brexit as being likely to cause renewed concern toward the end of 2020.

The governing council voted to maintain the deposit rate at the historic low of -0.5 per cent in line with market expectations in President Christine Lagarde’s first monetary policy meeting in Frankfurt earlier this month.

“I do not expect a turnaround to a positive interest rate environment next year,” Holzmann said in a statement on Friday.

The head of Austria’s central bank said concern would grow next December toward the end of the UK’s transition period for leaving the European Union.

The UK is currently on course to leave the EU on 31 January with Boris Johnson saying a transition period up until the end of 2020 was non-negotiable, regardless of whether trade and other deals are agreed.

“There is little time for negotiations on future relations, and the outcome of the negotiations is open,” Holzmann said.

The ECB has reiterated earlier this month that rates will stay at the current level or lower until the inflation outlook is close to but below 0.2 per cent, with underlying inflation consistently convergent with that level.

Its annual forecast for real GDP growth for the euro area was 1.2 per cent in 2019, an upward revision of 0.1 per cent, but down 0.1 per cent for 2020 compared with September’s projections at 1.1 per cent.

The forecast for 2021 and 2022 is currently 1.4 per cent.

By Michael Searles

Source: City AM

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Pound to Dollar Forecast: UK Interest Rate Uncertainty Impacts GBP to USD Rate

Pound Continues to Slip Lower Against the Dollar

The pound to US dollar rate ended last week on the backfoot, after briefly dipping below the 1.30 level on Friday. Already concerned about the Bank of England’s (BoE) interest rate outlook – which kept the possibility of cutting the cost of borrowing on the table in 2020 – the pair was left to digest the central bank’s second big announcement of the week. Mark Carney’s replacement as the governor of the BoE was revealed on Friday: Andrew Bailey, a BoE stalwart, will step into the role next month, creating further uncertainty about UK interest rates in the months ahead.

Interest rates weren’t the only factor weighing on the GBP vs USD pair. A sudden revival of no-deal Brexit fears, combined with dollar strength, also contributed to its downward spiral from a high of 1.34 on Monday. Boris Johnson’s suggestion earlier in the week that he would prevent the extension of the Brexit transition period, led to concerns that the upcoming negotiations could fail to deliver a comprehensive deal; a scenario that could leave the pound sterling to USD rate balancing on another cliff edge.

US-China Trade Doubts Boost Safe Haven Dollar

The US dollar took comfort in encouraging domestic data, before being boosted by lingering US-China trade uncertainty. Any hint of optimism that the trade war between the two superpowers can be resolved has the potential to make the safe haven dollar unappealing. Therefore, further stagnation in talks about a ‘phase one’ deal can have the opposite effect.

Looking Ahead

Britain took a huge stride towards leaving the EU when Parliament finally passed the Brexit withdrawal agreement on Friday. Mr Johnson’s reward for achieving such a thumping election majority also included an amendment outlawing an extension to the Brexit transition period. While this could still be revisited in the coming months, the pound will be hoping the UK government favours a soft Brexit agreement over splitting from the EU as soon as possible. The only UK data of note over the Christmas week is Friday’s UK finance mortgage approvals.

Will a raft of ecostats provide the US dollar with some festive cheer? Today sees the release of Durable Goods Orders, Nondefense Capital Goods Orders (excluding aircraft), New Home Sales and the Chicago Fed National Activity Index. On Thursday Initial Jobless Claims figures hit the headlines. Dollar investors will also continue to monitor developments in the US-China trade war, although the Christmas break means they probably shouldn’t hold their breath.

By Jonathan Watson

Source: Pound Sterling Forecast

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GBP to EUR Forecast: Boris to Prohibit Brexit Extension

The sterling vs euro interbank exchange rate stands at 1.1715 today. This is close to its lowest in over two weeks, or since December 3rd.

The pound stands near this fortnight low versus the common currency, first because UK Prime Minister (PM) Boris Johnson will today introduce his legislation, to “legally prohibit” the UK’s future EU trade deal talks going beyond the end of 2020.

The PM will add this clause, as part of the Withdrawal Agreement Bill (WAB), Parliament’s legal name for the Brexit agreement that PM Johnson agreed with former European Commission (EC) President Jean-Claude Juncker, in October.

Following last week’s UK election, PM Johnson enjoys an 80-seat majority in the House of Commons, so it’s thought that the amendment will smoothly pass.

However, for investors, this risks the possibility that the UK might “crash out” of Europe by December 31st 2020, without new trade arrangements, thereby weakening sterling.

UK Retail Sales Fall in November as BoE Holds Rates at 0.75%

UK retail sales fell by -0.6% in November, said the Office for National Statistics (ONS) on Thursday, below forecasts for a 0.3% rise.
The Bank of England held UK interest rates at 0.75%, as predicted, yet maintained open the possibility of a cut next year, if UK economic growth and inflation don’t pick up.

This morning, we’ll learn the UK’s revised GDP (Gross Domestic Product) growth figures for Q3, from July to September, which is forecast to remain at 0.3%.

This is the last major UK economic release of 2019. If the data surprises above or below this figure, it could affect the pound.

Eurozone Consumer Confidence Data Due as Lagarde May Surprise in 2020

Today the euro bloc’s consumer confidence figures for December are released by the EC at 15.00 GMT, and forecast at -7.0, from November’s -7.2.
However, this is a relatively minor release, so looks unlikely to earn the financial markets’ attention, unless the results arrive significant above or below forecasts.

This is the Eurozone’s last economic release of 2019, although turning to 2020, we’ll see what steps new European Central Bank (ECB) President Christine Lagarde takes, to prop up the bloc’s economic growth and inflation. If Ms. Lagarde surprises next year, this might impact the euro.

By James Lovick

Source: Pound Sterling Forecast

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Bank of England holds interest rate at 0.75 per cent

The Bank of England has decided to hold interest rates at 0.75 per cent in its last meeting of 2019 as it warned there was little chance of significant economic growth this quarter.

The Bank’s Monetary Policy Committee (MPC) voted 7-2 in favour of maintaining the rate, as it did at its previous meeting in November.

Sterling lost roughly half a per cent against the dollar after the announcement.

UK GDP increased by 0.3 per cent in the third quarter and is expected to rise only marginally in the year’s final quarter.

The monetary policymakers did point out that both sterling and the FTSE had rallied in the last month, with the pound’s exchange rate appreciating by around two per cent.

Minutes from the three-day meeting showed that Jonathan Haskel and Michael Saunders had voted to cut rates by 0.25 per cent.

The two argued: “The economy had been a little softer than expected, and there was a modest but rising amount of spare capacity.

“Core inflation was subdued. Employment growth was slowing and seemed likely to weaken further given trends in vacancies and firms’ hiring intentions.”

However, the MPC said it was yet unclear whether Boris Johnson’s victory would lift the uncertainty hanging over the UK economy.

The MPC said: “If global growth fails to stabilise or if Brexit uncertainties remain entrenched, monetary policy may need to reinforce the expected recovery in UK GDP growth and inflation.”

It added: “Further ahead, provided these risks do not materialise and the economy recovers broadly in line with the MPC’s latest projections, some modest tightening of policy, at a gradual pace and to a limited extent, may be needed to maintain inflation sustainably at the target.”

Analysts said that the Bank’s wait-and-see approach was “perfectly appropriate for some time yet”, due to the reduction in political risks from the result of the General Election.

Dr Kerstin Braun, president of Stenn Group, said: “Boris Johnson’s win provides the much-needed solidity the UK has been craving.

“Businesses can begin to see their future and now Brexit is confirmed to go ahead, The Bank of England needs to keep the economy steady as we navigate Britain’s exit from the EU.

“But a prolonged period of low growth, low inflation, and low interest rates will limit the Bank’s ability to create stimulus when needed.”

There had been speculation that the MPC would commit to a rates cut. In the Bank’s November meeting, two of the nine-member committee voted for a cut.

The decision comes after inflation data showed that the Consumer Prices Index stood at 1.5 per cent in November, flat on October and half a per cent below the Bank’s target of two per cent.

Earlier this month the US Federal Reserve left interest rates on hold, bringing to an end the cutting cycle instigated in July.

The European Central Bank also held rates in Christine Lagarde’s first meeting as president, downgrading its 2020 growth forecast in the process.

The announcement comes after the Bank said it had referred the hacking of its market-sensitive press conferences to the financial watchdog, after it emerged that an audio feed was supplied to high-speed traders before they were officially broadcast.

The Bank confirmed what it called a “wholly unacceptable” use of a back-up audio feed by a third-party supplier, and said it had reported the matter to the Financial Conduct Authority (FCA).

By Edward Thicknesse

Source: City AM