The Bank of England (BoE) announced its Monetary Policy Committee (MPC) voted 9-0 to maintain Bank Rate at 0.1 percent at its June meeting, as widely expected.

The MPC also voted unanimously to continue with the existing programme of GBP200 billion of UK government bond and sterling non-financial investment-grade corporate bond purchases and voted by a majority of 8-1 to increase the target stock of purchased UK government bonds by an additional GBP100 billion, to take the total stock of asset purchases to GBP745 billion..

In its statement, the BoE notes:

• Risky asset prices have recovered further from their March lows, although they have remained sensitive to news on evolution of pandemic;
• Recent data outturns suggest that fall in global GDP in 2020 Q2 will be less severe than expected at time of the May Monetary Policy Report;
• Downside risks to global outlook remain, however, including from the spread of Covid-19 within emerging market economies and from return to higher rate of infection in advanced economies;
• UK GDP contracted by around 20% in April, following a 6% fall in March. Evidence from more timely indicators suggests that GDP started to recover thereafter;
• Current below-target rates of CPI inflation can in large part be accounted for by effects of pandemic;
• Unprecedented situation means that outlook for UK and global economies is unusually uncertain. It will depend critically on evolution of the pandemic, measures taken to protect public health, and how governments, households and businesses respond to these factors;
• Emerging evidence suggests that fall in global and UK GDP in 2020 Q2 will be less severe than set out in the May Report;
• There is a risk of higher and more persistent unemployment in UK;
• CPI inflation is well below the 2% target and is expected to fall further below it in coming quarters, largely reflecting the weakness of demand;
• MPC judges that further easing of monetary policy is warranted to meet its statutory objectives;
• Committee agreed to increase target stock of purchased UK government bonds by an additional GBP100 billion in order to meet inflation target in medium term; expects that programme to be completed, and the total stock of asset purchases to reach GBP745 billion, around the turn of the year.
• MPC will continue to monitor situation closely and, consistent with its remit, stands ready to take further action as necessary to support the economy and ensure a sustained return of inflation to 2% target
• Committee will keep the asset purchase programme under review.