The MPC left the bank rate unchanged at 0.50% and stocks of purchased assets at GBP375bn. Ian McCafferty, member of MPC voted in favor of increasing the Bank Rate by 25bp immediately, hence, the vote was 1-8 in favor of rate change. The number of votes against rate change indicates the MPC is strongly in favor of holding the current bank rate.
The recent fall in oil prices give an indication that inflation outlook of the economy will be lower than expected; therefore, BoE will not be hurry to hike rates.
"Our call for a hike in Q1 16 has become very unlikely and thus we now expect the first BoE hike in Q2 16, probably in May 2016 in connection with the inflation Report (previously Q1 16, February 2016)", says Nordea bank in a research note.
