The Bank of England ended their monetary policy meeting yesterday with members of the Monetary Policy Committee (MPC) voting unanimously to keep interest rates unchanged at 0.1% and for the central bank to continue with its current asset purchase programme of £745 billion.

The policymakers painted an optimistic short-term outlook of the U.K. economy with the upwards revision of their growth forecast for 2020 – current projection of -9.5% as compared to May’s projection of -14%. Longer-term wise, the BoE does not expect the U.K. economy to recover to its pre-covid-19 levels until the end of 2021.

Central bank chief Andrew Bailey said in an interview that although negative interest rates are “in the toolbox” and that the members of the MPC have “looked at the experience of other central banks”, they have “no plan at the moment to bring it out of the toolbox and put it to work”.

As a result, GBP/USD strengthened briefly, moving close to the high of 2020 at the 1.32 handle after the release of the monetary policy decision before heading south.

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By Gim Hong Lee

Gim Hong has been a full-time currency trader for more than 2.5 years, focusing on day and swing trading of major currencies and their crosses. He is a frequent contributor of currency and economic analysis in Forex Trading Asia. Graduated from Columbia University in the City of New York with a bachelor’s degree in applied mathematics and statistics, the nerdy side of Gim Hong enjoys learning about data analysis, machine learning and their applications in currency trading.

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