• Some MPC though probability that further monetary stimulus would be needed had increased

Sterling hit hard by possibility of further QE. .

  • Most members thought key risks substantial and stood ready to act in either direction
  • Key risk that prolonged above target CPI would push inflation expectations higher
  • 2nd key risk that demand would not grow sufficiently, cause CPI to fall well below target medium term
  • One MPC member worried supply capacity could be hit if fall in H2 GDP prompted lay offs, scrapping capital
  • Inflation expectations so far subdued, activity data consistent with slowdown in H2 2010
  • Sentance still argued that well-communicated gradual rate rise would not destabilise confidence (he really should get out more)