–BOE MPC Most Members – Policy Decision Relatively Straightforward
–Of Those Some Saw Additional Stimulus Likely Needed In Due Course
–Others Saw Inflation Risks More Balanced Around Target In Medium Term
–But One Member Saw Decision ‘More Finely Balanced’
–Worries EZ Uncertainty, Risk Aversion Could Limit FLS Impact
LONDON (MNI) – The Bank of England Monetary Policy Committee voted
unanimously for unchanged asset purchases and Bank Rate at its
September meeting, with only one member seeing the decision on asset
purchases as ‘more finely balanced’.
The minutes show most members of the MPC viewing the decision as
“relatively straightforward” but some of these saw fresh stimulus as
more likely than not to be needed at some stage.
“For most members this decision was relatively straightforward,
although some of these members felt that additional stimulus was more
likely than not to be needed in due course, while others saw the risks
to inflation in the medium term as being more balanced around the
target”.
The majority opted to wait for “the next few months” in order to
gain “further insight into the underlying paths of supply and demand”.
Markets are still largely expecting that the MPC could take a
decision to extend further its asset purchases when it meets in November
to discuss its next set of quarterly inflation and growth forecasts.
The minutes of the meeting strike a more wary note on the
likely impact of the Funding for Lending on lending and borrowing –
noting that the plan is in its “early stages”.
“It had the potential to reduce funding costs and to encourage the
supply of credit. Set against that, heightened uncertainty, stemming
especially from the euro area, risk aversion on the part of households
and businesses might limit the demand for credit, making the impact of
the FLS difficult to predict”.
-London newsroom: Tel: +44 207 862 7492; email:dthomas@marketnews.com
[TOPICS: M$$BE$,MT$$$$]
