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Bank of England leaves rate unchanged in post-Brexit meeting, signals August cut

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Bank of England leaves rate unchanged in post-Brexit meeting, signals August cut

TheBank of England leftits key official interest rate on hold in its first monetary policy meetingsince the U.K. voted to leave the EU, wrong-footing analysts, but said it waslikely to ease in August.

The Bank of England also chose not to reactivate itsquantitative easing program, with the stock of government bonds it holdsunchanged at £375 billion. Analysts had expected a 25-basis-point cut from analready historic low 0.5% to counter any Brexit slowdown.

The bank's committee voted by a majority of 8-1 against arate change, with committee member Gertjan Vlieghe voting for a cut to 0.25%,it said, adding: "Most members of the committee expect monetary policy tobe loosened in August." The vote on QE was unanimous.

The size and nature of any stimulus will be decided as itprepares its August forecast and inflation report, the bank said.

Governor Mark Carney said June 30 that the bank would likelyease interest rates over the summer and perhaps implement other policies afterthe June 23 vote's shock result, which economists fear will sap businessinvestment as uncertainty hangs over the U.K.'s trading relations with the EU.