Analysts at TD Securities note that the Bank of England (BoE) left its policy rate on hold, as unanimously expected, but the statement and minutes had a bit more meat to them than TD was expecting, and left a fairly downbeat tone.

• “The BoE revised its near-term GDP forecast lower (Q3 GDP from 0.3% q/q to 0.2%), and the outlook for global growth has weakened due to the intensified trade war, which is having a "material negative impact" on global investment. However, the BoE also said that the additional stimulus from the government's spending review earlier this month should add 0.4% to GDP over the next 3 years, so it looks like fiscal is coming to the rescue to some extent.
• On Brexit, the BoE suggested that in the case of a lengthy Brexit extension, it may need to cut rates, even if a no-deal Brexit is avoided.
• While the BoE maintained its conditional hiking bias - rates will rise at a gradual pace and a limited extent, assuming a smooth Brexit and some recovery in global growth - as those conditions are further away from materializing, the door seems to have been opened to a rate cut instead.
• Our Brexit base case sees an extension to 31 Jan, but if the can is going to be kicked down the road beyond that point (likely in the case of a general election, a Labour win, and another extension in order to negotiate a new withdrawal agreement and hold a new referendum), then we could see the BoE cut rates in H1 2020.”