The Bank of England stays on hold ahead of Brexit finale

The Bank of England kept its benchmark interest rate at historic 0.1% low and kept unchanged its stimulus program at 895 billion pounds, awaiting more signals from Brexit finale.

Brussels and London are putting their last efforts to clinch the deal before the end of transition period on Dec 31, to avoid the shock from the outcome of no-deal divorce.

British central bank said it was ready to tolerate inflation above its 2% target in case of sharp fall of pound in no-deal scenario but highlighted that it is important to ensure that medium-term inflation expectations remain well anchored.

The BoE said it planned to keep the pace of its bond-buying, after having increased the amount by 150 billion pounds last month, broadly unchanged in early 2021, but stressed that the process could accelerate if markets return to the conditions seen in March, when pandemic devastated the economy.