-BOE Leaves Bank Rate On Hold At 0.5%; QE Stock At Stg375 Billion
LONDON (MNI) – The Bank of England Monetary Policy Committee left
policy on hold at its October meeting, as widely expected, with next
month’s meeting seen as the most likely date for further stimulus.
The MPC announced it had decided to leave Bank Rate on hold at 0.5%
and the stock of quantitative easing at stg375 billion, a result
predicted by 32 out of 33 economists in an MNI survey. Analysts’ median
forecast is for another stg50 billion of QE in November.
The MPC, in line with its usual practice, issued no statement to
accompany the no policy change decision.
The BOE is on track to complete its current tranche of stg50
billion of QE, taking the total to stg375 billion, in an auction on
October 31.
The MPC’s decision today entails there will be no reverse gilt
auctions in the week starting November 5 ahead of the MPC’s November 7
and 8 policy meeting.
The MPC has used QE as its active policy instrument in pumping
further stimulus into the economy, with Bank Rate having been left on
hold 0.5% since March 2009, making this the 43rd consecutive monthly no
change decision on the rate.
The minutes of this week’s meeting will be published on October 17.
In September, the MPC voted nine to zero to keep policy on hold,
although there were sharp differences of opinion on the MPC.
One MPC member at that meeting said “a good case could be made” for
more QE, while others thought it was more likely than not more stimulus
would be needed in due course and others were altogether more cautious
over the case for extra QE, seeing inflation risks better balanced
around the 2% target.
–London newsroom: 4420 7862 7491 email: drobinson@marketnews.com
[TOPICS: M$B$$$,M$$BE$]
