‘That the bank held rates is not surprising. Central banks globally are short of traditional ammunition to address any sustained slowdown in economic activity and whilst there remain non-traditional means of stimulation (more QE etc), their continuing effectiveness is being called into question. Fortunately, the rather one-dimensional approach of almost total reliance on monetary stimulus is now being supplemented by an increasing willingness of governments worldwide to engage fiscal policy to support growth.
‘I suspect the Bank’s view that the, at least, partial resolution of some of the political uncertainty in the UK, the decision to leave the EU, the clear government majority for the next five years etc, and the resultant uptick in surveys of business sentiment outweighs the weak hard data we’ve seen in the last quarter of 2019. Given the tumultuous events of the last quarter of 2019 in the UK it makes sense that, in the end, “wait and see” won over “a stitch in time”.’