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Bank of England votes 8-1 to keep interest rates on hold

Staff Writer |
The Bank of England kept interest rates unchanged to the surprise of many economists who had expected a 25 basis point cut to address post-Brexit risks.

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The BoE voted 8-1 to leave rates at 0.50% as the appointment of Theresa May as Prime Minister brought a semblance of economic stability in the fallout following the Brexit vote.

All Monetary Policy Committee members agreed to maintain the quantitative easing programme at £375bn, as expected, with Gertjan Vlieghe the only dissenting vote against standing pat on rates.

However, the BoE said it expects to boost stimulus measures at the August policy meeting once new economic forecasts are available.

"In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the Committee expect monetary policy to be loosened in August," the Bank said in a policy statement.

The pound jumped 1.73% against the dollar to $1.3374 following the announcement and a similar level against the euro back above €1.2.

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