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19 Mar 2014
BoE Minutes: GDP could strengthen further as recovery progresses
FXStreet (Łódź) - The BoE Minutes from the MPC monetary policy meeting held on 5 and 6 March and released today revealed that the Committee voted unanimously in favor of maintaining the interest rate at 0.5% and the stock of asset purchases at £375 billion.
The MPC agreed that “neither of the price stability knockout conditions that would override the policy guidance provided in August 2013 had been breached.” UK employment growth slowed down somewhat in the three months to December, staying above the 7% target level set by the BoE last year, so the policy guidance remained in place.
The MPC pointed out that the recent appreciation of the sterling put downward pressure on inflation, but that according to consensus “the probability of inflation being above 2.5% in 18-24 months time remained less than 50%.” The sterling could strengthen further “if prospects in the United Kingdom continued to be seen as increasingly favorable relative to those of its main trading partners.”
Domestic recovery has been broadening, although it is still far from balanced and sustainable. It was also noted that the recovery wasn't so much dependent on the household sector as previously thought.
The MPC agreed that “neither of the price stability knockout conditions that would override the policy guidance provided in August 2013 had been breached.” UK employment growth slowed down somewhat in the three months to December, staying above the 7% target level set by the BoE last year, so the policy guidance remained in place.
The MPC pointed out that the recent appreciation of the sterling put downward pressure on inflation, but that according to consensus “the probability of inflation being above 2.5% in 18-24 months time remained less than 50%.” The sterling could strengthen further “if prospects in the United Kingdom continued to be seen as increasingly favorable relative to those of its main trading partners.”
Domestic recovery has been broadening, although it is still far from balanced and sustainable. It was also noted that the recovery wasn't so much dependent on the household sector as previously thought.