BoE justifies monetary policy on poor outlook for UK economy - BTMU

Analysts at Bank of Tokyo Mitsubishi explained that the BoE justified its “proactive” and aggressive monetary policy response by unveiling a marked downgrade to their outlook for the UK economy in both the short and medium-term.

Key Quotes:

"Governor Carney stated that it was the largest quarterly downward revision since the MPC was formed."

"The cumulative growth in output is projected to be around 2.5% lower at the end of the forecast period than in the MPC’s previous projections from May."

"Little growth is seen in the second half of this year expanding by just 0.1% in Q3."

"After taking into account the impact from the new easing measures, the BoE expects economic growth of 2.0% in 2016, 0.8% in 2017, and 1.8% in 2018."

"The BoE acknowledged that much of this downward revision to growth reflects the negative hit to economy’s potential supply following the Brexit vote, which monetary policy easing cannot offset."