BoE stays put, says uncertainty around EM, trade and Brexit have increased

Rate-setters at the Old Lady on Threadneedle Street were unanimous in their decision to keep Bank Rate unchanged on Wednesday.

The stock of Bank's purchases of gilts and corporate bonds under its Asset Purchase Facility were also unchanged, at £435.0bn and £10.0bn, respectively.

In its policy statement, the Monetary Policy Committee says that downside risks to global growth have increased "to some degree", noting the tighter financial conditions in emerging markets and the announcement of further protectionist measures in the US and China.

The latter, it said, " could have a somewhat more negative impact on global growth than was anticipated at the time of the August Report."

Likewise, financial markets appeared to be pricing-in "greater uncertainty" around how the UK's exit from the European Union will evolve.

"The MPC continues to recognise that the economic outlook could be influenced significantly by the response of households, businesses and financial markets to developments related to the process of EU withdrawal," the MPC said.

However, the MPC's August projections for the UK appeared to be "broadly on track", while the global economy appeared to be growing at "above-trend" rates.

Thus, assuming a "smooth adjustment" of the economy to what markets were, on average, expecting for the withdrawal process from the EU, then a gradual pace of tightening would continue to be appropriate.

"Any future increases in Bank Rate are likely to be at a gradual pace and to a limited extent."