Following its August policy meeting, the Bank of England announced that it raised the policy rate by 50 basis points to 1.75% as expected.

The policy statement revealed that Monetary Policy Committee (MPC) member Silvana Tenreyro voted to hike the rate by 0.25 basis points.

Follow our live coverage of the BoE policy announcements and the market reaction.

Market reaction

With the initial market reaction, the GBP/USD pair edged lower and was last seen trading unchanged on the day at 1.2145.

Key takeaways from policy statement as summarized by Reuters

"Mpc is provisionally minded to start gilt sales shortly after September MPC meeting, subject to economic and market conditions and a confirmatory vote."

"UK projected to enter recession in Q4 2022, recession to last 5 quarters, GDP to fall 2.1%."

"Inflation to peak at 13.3% in October 2022 (June forecast: "Slightly above 11%" in October 2022)."

"MPC will be particularly alert to indications of more persistent price pressures, will if necessary act forcefully."

"Risk that long period of externally generated inflation will lead to more enduring domestic price and wage pressures."

"Real household post-tax income to fall sharply in 2022 and 2023, largest 2-year fall since records began in 1964, consumption to fall."

"Labour market remains tight, domestic cost and price pressures elevated."

"Risks around forecasts are exceptionally large, MPC placing less weight on any single set of assumptions."