I read their forecast carefully. It is rightly riddled with uncertainty.
The good news is they no longer expect a recession. They anticipate 2% growth this year, and 1.8% growth in 2018. It is difficult to understand why they think growth will reduce to 0.8% next year . There was sufficient monetary stimulus prior to their latest set of monetary actions to justify a higher forecast.
Their forecasts are contradictory, and struggle to find any bad news, let alone enough to justify their extraordinary actions. They admit that they do yet see a material slowing in consumer growth, yet consumption is the dominant part of GDP. They have had to give up falls in FTSE 100, and even in FTSE 250 as both indices are at or above where they were prior to vote, which was itself a high level. So now they point out that a couple of sectors within the index are weak, financials and construction. There are usually a few sectors that lag or do badly when an index rises, but it does not normally herald recession.
They cite unspecified property funds that have closed owing to redemptions. They do not point out that some of those funds refuse to accept new subscriptions! Nor do they point out that lots of funds have not closed, and do not take such a pessimistic view of property values. I don’t think we can take seriously mark downs when we are not allowed to buy the units so marked down! They do admit that maybe residential property will not fall very much after all, much to the disappointment of all those who would like to be able to afford a home.
It looks as if the Bank has decided it has to get away from its absurd pessimism that we would plunge into the recession they talked about prior to the vote. To do so they both change the forecast to a more optimistic one and take action on money to claim the credit for staving off the recession they forecast. Many people did not believe the forecast in the first place. It is interesting that the Bank now thinks this year will be just fine, and thought it could delay monetary action by over a month after the vote. It is a pity they did not delay it longer, as I doubt it was ever needed.