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18 Dec 2013
BoE Minutes: MPC voted unanimously to keep QE and rates on hold
FXstreet.com (Łódź) - As expected, the BoE Minutes from the MPC monetary policy meeting held on 4 and 5 December and released today revealed that the Committee voted in favor of maintaining the interest rate at 0.5% and the stock of asset purchases at £375 billion.
According to the minutes: “Developments in UK financial markets had reflected reactions to the continuation of data suggesting that the domestic recovery remained robust with diminishing inflationary pressure.” They also pointed out that the UK economy was seen improving at a quicker pace than that of the Eurozone or the US, which was reflected by the recent appreciation of the sterling against the euro and the dollar. This added to the disinflationary pressure and if GBP continues gaining strength, it could weaken UK recovery.
The MPC expects the CPI rate to drop toward the 2% target in the first quarter of 2014. As far as GDP is concerned, forecasts point to 0.9% growth in the last quarter of 2013. This is a more cautious view than that of business surveys which point to a 1.25% expansion, but as the MPC explained: “In part that judgement reflected more recent signs of softness in some of the consumer spending data: retail sales had fallen by 0.7% on the month in October, while private car registrations, the CBI distributive trades and the GfK consumer confidence surveys had also weakened a little recently.”
According to the minutes: “Developments in UK financial markets had reflected reactions to the continuation of data suggesting that the domestic recovery remained robust with diminishing inflationary pressure.” They also pointed out that the UK economy was seen improving at a quicker pace than that of the Eurozone or the US, which was reflected by the recent appreciation of the sterling against the euro and the dollar. This added to the disinflationary pressure and if GBP continues gaining strength, it could weaken UK recovery.
The MPC expects the CPI rate to drop toward the 2% target in the first quarter of 2014. As far as GDP is concerned, forecasts point to 0.9% growth in the last quarter of 2013. This is a more cautious view than that of business surveys which point to a 1.25% expansion, but as the MPC explained: “In part that judgement reflected more recent signs of softness in some of the consumer spending data: retail sales had fallen by 0.7% on the month in October, while private car registrations, the CBI distributive trades and the GfK consumer confidence surveys had also weakened a little recently.”