MPC votes unanimously to hold Bank Rate at 0.5%

The MPC noted that CPI inflation fell from 3.1% in November to 3.0% in December while uncertainty regarding the UK's withdrawal from the EU continues.

However the Committee said that if the economy evolves in line with its forecasts, monetary policy will need to be tightened earlier and by a greater extent compared to its previous predictions in the November report.

The MPC says UK net trade is benefiting from robust global demand. GDP growth is expected to average around 1.75% over the forecast, a slightly faster pace than was projected in November.

CPI inflation is projected to fall back gradually over the forecast but remain above the 2% target in the second and third years of the MPC’s central projection.

In its minutes, the MPC said that "developments regarding the United Kingdom’s withdrawal from the European Union – and in particular the reaction of households, businesses and asset prices to them – remain the most significant influence on, and source of uncertainty about, the economic outlook".