BOE surprises markets by holding rates, signals August loosening

London

THE Bank of England kept interest rates unchanged on Thursday, wrong-footing many investors who had expected the first cut in more than seven years with Britain's economy reeling from last month's vote to leave the European Union.

The BOE said it was likely to deliver stimulus in three weeks' time, possibly as a "package of measures", once it has assessed how the June 23 referendum decision has affected the economy, the world's fifth largest.

"In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the committee expect monetary policy to be loosened in August," the bank said in minutes of its July meeting which ended on Wednesday. "The precise size and nature of any stimulatory measures will be determined during…