Summary

  • FTSE 100 falls 0.25% but FTSE 250 ends higher

  • Pound jumps against dollar and euro

  • Bank of England holds interest rates at 0.5%

  • Theresa May shakes up Business Department

Live Reporting

Dan Macadam

  1. Painted into a corner?

    It’s clear that the MPC thinks there just hasn’t been enough economic data since the Brexit to warrant further easing just yet. The Bank has kept its powder dry and has more ammunition to ease at a later date if required. However the Bank now risks painting itself into a corner – if the economic data remains upbeat over the coming month, does it stick to its promise and ease in August, or keep rates where they are?”

    Neil Wilson, ETX Capital

  2. Bank of England caution 'disappointing' says NIESR

    City workers talk on their mobile phones near the Bank of EnglandGetty Images

    The Bank of England's decision to hold interest rates at 0.5% is "disappointing", according to Angus Armstrong, director of macroeconomics at the National Institute of Economic and Social Research.

    “In their communications last week they gave a clear indication to anticipate further monetary accommodation,” he says.

    "The likelihood of monetary easing was subsequently discounted by financial markets. Whatever the economic merits or demerits of cutting interest rates at this juncture, the lack of clear direction is more likely to add to economic uncertainty and therefore be detrimental to demand and the economy."

  3. MPC 'dithers'

    The Monetary Policy Committee’s decision to leave interest rates and its stock of asset purchases unchanged has disappointed markets - and us. It now needs to deliver decisively in August.

    Jonathan Loynes, Capital Economics

  4. 'Evidence-based approach'

    The minutes of July’s meeting signal that the MPC wants to take a cautious, evidence-based approach to assessing how much extra stimulus is warranted...The Committee "discussed various easing options and combinations thereof”, suggesting that a Bank Rate cut might be supplemented by more QE. While we continue to expect interest rates to be cut to 0.25% next month, we doubt that the MPC will go further.

    Samuel Tombs, Pantheon Macroeconomics

  5. FTSE 100 loses ground after rates decision

    The FTSE 100 share index dropped sharply and briefly turned negative after the Bank of England decision to hold rates.

    It's now trading pretty much flat at 6,674 - 0.04% or 3.4 points higher.

  6. Savers 'breathe a sigh of relief'

    Anna Bowes, director at independent savings adviser SavingsChampion.co.uk, says: “The decision to leave base rate unchanged for at least another month will see savers breathe a sigh of relief - but they can't afford to be complacent. 

    “We would argue that providers no longer need a change to the base rate, to cut savings rates. Since Funding for Lending was introduced in 2012 we've seen nearly 4,700 cuts to existing savings accounts, although the base rate has remained at 0.50% since 2009.”

  7. Carney confusion?

    5 live presenter Adam Parsons tweets:

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  8. Competing forces

    Kamal Ahmed
    Economics editor

    The markets' judgement that Mark Carney had clearly signalled a July rate cut two weeks ago when he said "some monetary policy easing will likely be required over the summer" has proved erroneous.  

    Some might mutter about the governor showing flashes of the "unreliable boyfriend" he has been accused of before when he has guided the market.

    However, the governor's words do not contradict today's decision. "Over the summer" is not one month.

    And monetary easing can mean more than just a cut in interest rates.

    The MPC is dealing with two competing forces.

    First, a slowdown in economic growth following the referendum vote which many economists believe could tip the economy into recession.

    Second, a possible increase in inflation sparked by the fall in the value of sterling.

    At the moment the data on the former is limited.

    Read more from Kamal here

  9. The 'unreliable boyfriend' is back...

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  10. The odd one out

    It appears that one member of the Monetary Policy Committee voted for an immediate rate cut - and that was Gertjan Vlieghe.

    But he was the odd one out - "most members of the Committee expected monetary policy to be loosened in August," the statement said.

  11. Waiting for a rate cut...

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  12. Bank of England predicts 'significant weakening' in housing market

    The Bank of England has held rates for now - saying it's too early to judge the Brexit effect. This is from its minutes:

    "Official data on economic activity covering the period since the referendum are not yet available.  

    "However, there are preliminary signs that the result has affected sentiment among households and companies, with sharp falls in some measures of business and consumer confidence.  

    "Early indications from surveys and from contacts of the Bank’s agents suggest that some businesses are beginning to delay investment projects and postpone recruitment decisions.  

    "Regarding the housing market, survey data point to a significant weakening in expected activity.  

    "Taken together, these indicators suggest economic activity is likely to weaken in the near term."

  13. FTSE 100 drops after rates decision

    The FTSE 100 share index has dropped sharply after the Bank of England decision to hold interest rates at 0.5%.

    It's now trading 0.43%, or 28 points higher at 6,698, compared with being around 62 points higher before the midday announcement.

    The pound is trading up against dollar at $1.3480.

  14. 'Patience is a virtue'

    The Bank of England has decided that patience is a virtue. There’s going to be a bit of disappointment in financial markets. They had taken Carney’s earlier comments about easier monetary policy to heart and forgot his reputation for changing his mind. But the next meeting is only three weeks away, and by then Carney and his colleagues will have a few extra post-referendum data points to digest as well as a new set of forecasts. The market should get it’s way then, with an interest rate cut likely and renewed quantitative easing possible

    Paul Diggle, Aberdeen Asset Management

  15. August rate cut expected

    Most Bank of England policy makers expect a cut in August, minutes show.

  16. Bank of England holds rates
    Breaking

    The Bank of England has held UK interest rates at 0.5%.

  17. Two minutes to go...

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  18. FTSE 100 higher as investors await BoE rates decision

    With five minutes to go until the Bank of England rates decision, the FTSE 100 is trading higher by around 0.9%, or 62 points at 6733, boosted by expectations of an interest rate cut.

    Miners and housebuilders are among to the top risers on the index.

    The pound is up 0.76% against the dollar at $1.3247.

  19. Drum-roll please...

    Ohio State University marching bandGetty Images

    We're counting down to the Bank of England's rate decision here on the business desk...10 minutes to go...

  20. Hammond: No separate Scottish EU deal

    Philip HammondGetty Images

    New Chancellor Philip Hammond has said he cannot envisage a scenario where Scotland has a different relationship with the EU from the rest of the UK.

    Speaking to BBC Scotland's Good Morning Scotland programme, Mr Hammond said the best place for Scotland was within the UK economy outside the European Union.

    That is in stark contrast to First Minister Nicola Sturgeon who wants Scotland to remain within the EU.

    Scots voted by 62% to 38% for Britain to retain membership of the EU.

    Read more here.