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You may not have noticed, but the Bank of England’s (BOE) monetary policy decision yesterday was actually one of the biggest highlights among the economic releases this week.

What exactly did the central bank say? More importantly, how did the pound react to its announcements?

Here are five takeaways:

1. No policy changes in September

After bringing big bullets last month, all nine members of the Monetary Policy Committee (MPC) have decided to stand pat and keep their policies steady this month:

  • The bank rate remains at a record low of 0.25%
  • Corporate bond purchases of up to £10B
  • £60B added to the asset-purchasing program over the next six months to a total of £435B

Even MPC members Kristin Forbes and Ian McCafferty who voted against bond-buying last month supported the majority, saying that reversing the changes soon carries risk.

2. Initial impact of the policy changes is “encouraging”

Remember when Mark Carney said that he’s “absolutely serene” about the BOE’s decision to add stimulus last month? Well, it’s probably because they’re working…so far.

Since the BOE’s last meeting, asset prices have received boosts, corporate bond spreads have narrowed, and declines in bond yields have seen partial reversals.

More importantly, regular banks are cutting their Standard Variable Rate and Tracker rates in line with the BOE’s bank rate. Deposit rates have also fallen though not as sharply as the BOE’s rate did.

Overall the BOE is feeling peachy with its decision but is still vigilant on their possible impact on household and firms’ borrowing activities.

3. Brexit wasn’t such a bad thing in the short-term

Can’t say the same for their street cred though. See, back in June Mark Carney and his gang got a busy warning against Brexit, saying that a vote to leave the EU could lead to unemployment, financial instability, and even a recession.

Fast forward to today and the BOE is forced to acknowledge that the initial reports aren’t doing as badly as they expected.

They said that “while most business investment intentions surveys weakened further since the August Inflation Report, the near-term outlook for the housing market is less negative than expected and the indicators of consumption have been a little stronger than expected.

Right now the BOE sees less slowdown in H1 2016, with Q3 GDP expected to grow by 0.2% to 0.3% against the 0.1% uptick expected in August. Still, the minutes stressed that “albeit to a lesser extent than anticipated, this would still be a ‘material slowing’ in growth.”

Guess it was easier to say “we were somewhat right” than “we were wrong?” Meanwhile, inflation is still expected to reach its 2.0% target in 2017 though consumer prices will be a bit lower for the rest of 2016.

4. More stimulus in the works?

In the last part of its release, the BOE suggested that its economic outlook has not changed despite the better-than-expected but short-term reports. It went all Autobots on the markets, saying that it will watch over the next economic releases and then think about its next steps.

More specifically, if the reports turn out to be consistent with their gloomy projections in August, then a majority will likely support a “further cut in the Bank Rate.” Market players are currently betting on a 0.10% cut on November 3 when the BOE next releases its inflation assessment.

5. Traders sold the pound like it was a Note 7

Forex traders chose to focus on the prospect of more easing from the BOE. Fortunately, the lack of market catalysts and probably a bit of profit-taking ahead of next week’s central bank decisions encouraged intraday reversals for many pound pairs.

GBP Reaction to the BOE Statement
GBP Reaction to the BOE Statement

GBP/USD hit a low of 1.3180 before ending the day at 1.3242 while GBP/JPY also fell to 134.67 before closing at 135.28.

Heck, even EUR/GBP shot up to .8538 before falling back down to .8491!