It is the first time the BoE has released its interest rate decision and the minutes of the policy meeting on the same day.
According to the bank, CPI inflation fell back to zero in June, with around three quarters of the difference between the current rate and the 2% target the result of “unusually low contributions from energy, food, and other imported goods prices”.
The remaining quarter of a percentage point was the result of past weakness of domestic cost growth, and unit labour costs in particular”.
The Bank said the near-term outlook for inflation remained muted, adding that it expects the falls in energy prices of the past few months to continue to bear down on inflation at least until the middle of next year.
“Nonetheless,” it said, “A range of measures suggest that medium-term inflation expectations remain well anchored. There is little evidence in wage settlements or spending patterns of any deflationary mindset among businesses and households.”
In the minutes to the meeting, the BoE said for most members of the MPC, the inflation outlook meant no change in policy was necessary.
“In light of the reduction in oil prices and appreciation of sterling over the past three months, it appeared that the increase in inflation over the following year would be more gradual than had previously been supposed,” it said.
