BoE notes Brexit concerns mounting - ANZ

Analysts at ANZ explained that the BoE left rates unchanged as expected and the committee voted 6-2 to keep rates on hold, with McCafferty and Saunders voting for hikes. 

Key Quotes:

"GDP forecasts were lowered, wage growth seen weaker (3% vs 3.5% next year) and uncertainty in regard to Brexit acknowledged. That is not the backdrop to lift rates near term if you believe that the inflation rise is temporary and a result of sterling's post referendum weakness."

"The Governor noted that Brexit is casting a big shadow over the outlook and confidence in an orderly exit is starting to fade with EU negotiations the most important factor for the outlook."

"Inflation is seen at 2.2% in three years and the BoE envisages two rate hikes over that period, the first in Q3 next year as spare capacity is absorbed, but there seems a lot of uncertainty around that. Separately, the ECB noted a “substantial degree of stimulus is still needed”."