The Bank of England kept its monetary policy unchanged at the Bank’s meeting today, Thursday, 24th of June, as the members of the Bank voted unanimously to keep the current interest rates 0.1%. The unanimous vote was to maintain the stock of non-financial investment-grade corporate bond purchases at £20 billion, while the vote was 8-1 to continue the bank’s existing bond purchase program of £857 billion.

The monetary policy report issued by the Bank showed that the British GDP growth was expected, according to its estimates in May, to grow strongly during the year 2021 to pre-corona levels, and that inflation would temporarily rise above the target of 2%. Accordingly, the Bank revised its forecast for GDP growth with an increase of 1 % in the current meeting compared to expectations for the month of May after easing restrictions on economic activity.

Unemployment rates in Britain fell slightly to 4.7% in the three months ending in April, while wage levels were 5.6% higher compared to the previous year, while inflation rose to 2.1% in May, exceeding the bank’s target with developments in energy and other commodities prices and is expected to exceed levels The 3% is for a temporary period.

The Monetary Policy Committee of the Bank expects that the increases in inflation are temporary and transient, and that the Bank does not intend to tighten monetary policy until there are clear indications of improving economic activity and achieving the target inflation levels of 2% in a sustainable manner.

The British pound reacted negatively with the statement and fell against the US dollar by more than 79 points to test 1.3905 levels, and it is now trading at 1.3922 levels.