Although the Bank rate stayed unchanged at 0.75% as expected, it is surprising to see two members voted for a rate cut. At the minutes, BOE has left the door open for a rate cut for the first time. British pound slumped as the message came in more dovish than anticiapted.

The central bank revised lower its GDP growth forecast to +1.2% y/y for 2020, compared with +1.3% projected in August. Growth for this year is revised higher, by +0.1 percentage point, to +1.4%. Inflation forecasts are downgraded across the board. Based on market interest rate, inflation in one year’s time is revised lower to 1.51%, from +1.9% in August. Inflation expectations in two years and three years are revised lower to +2.03% and +2.25%, from +2.23% and +2.37% respectively. As the central bank noted, the market expects lower policy rate to 0.5% in 2022.