18 Jun 2014
BoE Minutes: MPC voted 9-0 to keep rates and QE steady
FXStreet (Łódź) - BoE Minutes from the MPC monetary policy meeting held on 4 and 5 June and released today reveal that the Committee voted unanimously in favor of maintaining the interest rate at 0.5% and the program of asset purchases steady at £375 billion, as widely expected.
The Monetary Policy Committee expressed surprise with the low probability of a 2014 rate rise being priced in. They also stressed that "the more gradual the intended rise in Bank Rate, the earlier it might be necessary to start tightening policy."
The MPC said that the economic recovery in the UK was gaining momentum and that the strong pound was helping to push down inflation. They added however that "the weakness in inflation elsewhere, especially the euro area, contained information about underlying global inflationary pressures that might yet become evident in the United Kingdom."
The majority of the BoE policymakers saw spare capacity remaining in the range of 1% to 1.5% of GDP in 2014 Q2. They suggested that more slack should be absorbed before an increase in interest rates was warranted. They also said it was difficult to judge how persistent is the slowing in housing market activity and that the issue would be addressed by the FPC this month.
Following the release of the report GBPUSD posted 1.6947 and then 1.7004 before returning to around 1.6970.
The Monetary Policy Committee expressed surprise with the low probability of a 2014 rate rise being priced in. They also stressed that "the more gradual the intended rise in Bank Rate, the earlier it might be necessary to start tightening policy."
The MPC said that the economic recovery in the UK was gaining momentum and that the strong pound was helping to push down inflation. They added however that "the weakness in inflation elsewhere, especially the euro area, contained information about underlying global inflationary pressures that might yet become evident in the United Kingdom."
The majority of the BoE policymakers saw spare capacity remaining in the range of 1% to 1.5% of GDP in 2014 Q2. They suggested that more slack should be absorbed before an increase in interest rates was warranted. They also said it was difficult to judge how persistent is the slowing in housing market activity and that the issue would be addressed by the FPC this month.
Following the release of the report GBPUSD posted 1.6947 and then 1.7004 before returning to around 1.6970.