BOE MPC leave interest rates on hold. Vote 7-2

Author: Mike Paterson | Category: Central Banks

BOE MPC decision now published 14 Sept

  • bank rate 0.25% as prev
  • asset purchase target GBP 435bln
  • corp bond target
  • vote 7-2 as exp vs 6-2 prev 

Pound lower on the headline. Rebounds on the Minutes which say some stimulus withdrawal likely in coming months

GBPUSD  1.3270 from 1.3151   EURGBP  0.8967 from 0.9050

I did warn in my preview for both sellers and buyers to stand poised.

Minutes highlights;

- 7-2 for unchanged rates & 8-0 for unchanged QE at GBP435B; Corporate bond-buys GBP10B
- Some withdrawal of stimulus likely appropriate in 'coming months'
- A majority of MPC think a lessening of 'trade-off' evident if economy continues on current path
- ALL of MPC think rate hikes will be faster than current market pricing, if economy follows August QIR projections
- Early Q3 data stronger than committee anticipated in August Report
- Recent developments reinforce belief slack to disappear more rapidly than expected
- Underlying pay growth has showing signs of recovery, albeit still modest
- There remains considerable risk to the economic outlook
- All on MPC agree rise in Bank rate should be 'gradual' and 'limited'
- Overall, UK weighted world GDP growth in Q2 slightly stronger than expected by MPC
- MPC notes spot oil prices 12% higher than in August Report

                                  BOE MPC still in mixed mindset

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