I’ll be interested to see the minutes of the latest Bank of England MPC meet, scheduled for release Wednesday.  Basically I’m interested to see the vote regarding QE amid speculation two members may have voted for it’s expansion. 

 I continue to be relieved that there apppears to be a healthy counter balance to Andrew Sentance and his call for tighter monetary policy.

The Bank of England is sitting on an £8 bln net profit from its £200 bln quantitative easing fund.

Cable up marginally in early European trade, presently at 1.4510.  Sell orders noted up at 1.4540/50, stops just above there,  Buy orders noted down at 1.4450/60, stops through 1.4420.

As expected.

The Bank of England monetary policy committee should keep interest rates low for foreseeable future and be prepared to extend its £200 bln QE programme, the “shadow” MPC says.   

Cable little easier on that, presently at 1.5135.

• Timing of stimulus withdrawal will be difficult decision, guided by inflation outlook
• Range of evidence that QE having desired impact, but still long way to go
• Much of impact of QE purchases yet to feed through, we’ll know more over coming year
• Tentative signs that nominal spending in economy is starting to accelerate
• When time comes policy could be tightened by rate hikes, asset sales in any order

I kinda like BarCap’s stuff. Seem pretty switched on to me, and they have a solid reputation.

They see UK rates, QE on hold, and think it unlikely we’ll see any change ahead of the general election.

Brighter than expected data from Britain’s dominant services sector has helped ease fears economy may have slipped back into recession in the first quarter.

Cable having rallied as high as 1.5476, back quickly to 1.5450 in wake of comment hitting wires.

• Sterling has stabilised since early 2009, won’t move much beyond where it is now

• Don’t know whether will have to return to more QE to avoid return to recession
• Stand ready to expand or contract monetary policy as situation demands
• Expansion in bank lending only likely to occur after balance sheets further consolidated

Well sterling has taken it on the chin. Cable at 1.5430 off a cent on day, off nearly one and a half from session high.  GBP/EUR is up at .8830 from early .8775.

King’s comments have been pretty downbeat, dovish in tone, and there has certainly been  more emphasis on possiblity of further QE than the sterling bulls would have liked.  Is there anything startingly new or surprising, not really. 

Would expect decent buy interest to be lining up down in the 1.5350/80 area. Next technical support area 1.5395/05.

• On balance felt that keeping stock of QE purchases in place was right for February
• Will come back to QE decision in future MPC meetings
• If economic outlook weaker, strong case to expand QE purchases

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