Bank of England Surprisingly Left Rate Unchanged

The Bank of England surprisingly left its widely expected rate unchanged.

The nine-member monetary committee led by Governor Mark Carney voted 8-1 to keep the rate at 0.5 percent on Thursday.

Economists had predicted the Bank of England will loosen monetary policy to aid the economy against possible effects of Brexit, while investors had priced in more than 80 percent chance the interest rate would be lowered.

While the decision is expected to shock the financial markets, the bank said “the precise size and nature of any stimulatory measures will be announced during the August forecast and inflation report.”

“Most members of the committee expect monetary policy to be loosened in August,” officials said, according to the minutes of their July 13 meeting. “The committee discussed various easing options and combinations thereof. The exact extent of any additional stimulus measures will be based on the committee’s updated forecast, and their composition will take account of any interactions with the financial system.”

The pound rose 2 percent to 1.3476 against the US dollar after the statement was released, its highest in two weeks.