The market-implied path for Bank Rate of 1.1% in 2019 Q1 is around 20 basis points lower than in the run-up to the November Report.
According to market contacts, this is likely to reflect market participants’ concerns that weaker global growth could weigh on the UK outlook.
The MPC reiterated that this forecast is dependent "on a number of judgements, each with substantial uncertainty around it".
The Bank put the push-back down to sterling ERI depreciating by 3½% and oil prices falling substantially since November, to around US$29 per barrel.
The Bank of England added that CPI inflation has begun to rise, but remains close to zero due primarily to falls in the prices of energy, food and other imported goods prices.
Following a period of above-average growth, four-quarter GDP growth has slowed by slightly more than expected.
In the MPC’s central projection, conditioned on Bank Rate rising very gradually, four-quarter GDP growth rises back to around 2½%. Although CPI inflation is likely to remain low in the near term, once the temporary drag from energy and other imported goods prices has faded, strengthening domestic cost growth is projected to take inflation back to the 2% target in around two years and then slightly above it.
At its latest meeting, the MPC voted unanimously to maintain Bank Rate at 0.5% - the first time in six months that all members were undivided.
