The pound is getting smashed after the Bank of England held rates for the 80th month in a row
The Bank of England's Super Thursday bundle of decisions and inflation analysis is out.
Although the main headlines are that policy is unchanged - the rate-setting monetary policy committee (MPC) voted 8-1 to keep interest rates where they are - the pound is getting hammered against the US dollar.
Here's GBP/USD reaction at 12 p.m. UK time (7 a.m. ET). It dropped 0.69% and is currently holding steady there:
The UK's central bank lowered its economic growth forecasts, sending signals that it would be happy to keep rates lower for longer.
The stock market got a boost on the news. Having traded down most of Thursday, the BOE sent the FTSE 100 index into positive territory:
Business Insider Economics Editor Mike Bird said:
To sum it up - Britain's fine. The rest of the world, not so much.
The expected performance of the domestic economy is basically unchanged from August's inflation report, as far as the Bank is concerned. It's a recovery driven by strong domestic demand - employment's going to keep growing, productivity should pick up, respectable wage growth will return. On that front, the BoE is where it was in August.
On the other hand, the global situation is not looking so strong. Though advanced economies aren't sagging too much, emerging economy growth was 4% in the second quarter, as opposed to the 4.25% the Bank expected. Oil prices are 14%. In the MPC's minutes, the members noted that "recent data news in the international economy had on balance continued to be disappointing." For a small and relatively open economy like the UK, what happens abroad matters.
Between those two points - a British economy that is doing pretty much as expected, and an international economy that's doing worse - the Bank seems more or less happy to give the appearance of sitting on its hands as market expectations for a rate hike drift further and further into the future.