23 Oct 2013
BoE Minutes: UK recovery gaining momentum
FXstreet.com (Barcelona) - BoE Minutes from the MPC monetary policy meeting held on 8 and 9 October and released today reveal that the Committee voted unanimously in favor of maintaining the interest rate at 0.5% as well as in favor of continuing with the program of asset purchases totaling £375 billion.
The MPC judged on the basis of recent economic data that the recovery in the UK was gaining momentum. They suggested that in the second half of the year the country would see stronger growth than previously forecast, of about 0.7%, and that the unemployment rate would fall more quickly than anticipated in August.
Nevertheless, the BoE expressed worries over the economic instability in other countries, which could harm UK exports: “The outlook for the United States seemed slightly softer on the month, the recovery in the euro area remained modest, and there remained a risk of a sharp slowdown in emerging economies. Overall, therefore, there was a risk that the recovery in the United Kingdom might be less well balanced between exports and domestic consumption than was ultimately needed.”
James Knightley from ING, who sees the UK economy strengthening further in Q4, suggests that “policy tightening could start in early 2015, much earlier than the 2H16 date suggested by the BoE’s current forecasts.”
The MPC judged on the basis of recent economic data that the recovery in the UK was gaining momentum. They suggested that in the second half of the year the country would see stronger growth than previously forecast, of about 0.7%, and that the unemployment rate would fall more quickly than anticipated in August.
Nevertheless, the BoE expressed worries over the economic instability in other countries, which could harm UK exports: “The outlook for the United States seemed slightly softer on the month, the recovery in the euro area remained modest, and there remained a risk of a sharp slowdown in emerging economies. Overall, therefore, there was a risk that the recovery in the United Kingdom might be less well balanced between exports and domestic consumption than was ultimately needed.”
James Knightley from ING, who sees the UK economy strengthening further in Q4, suggests that “policy tightening could start in early 2015, much earlier than the 2H16 date suggested by the BoE’s current forecasts.”