» Central Bank Outlook: BoE More Divided Decision Economics

Central Bank Outlook: BoE More Divided

Posted October 17, 2012 by rvillareal

  • The Minutes to the 3-4 October BoE MPC meeting showed the committee once again to be unanimous over its decision to keep the asset purchase program target unchanged at £ 375 bln. Moreover, the Committee was also unanimous in its decision to keep the benchmark interest rate at a record low of 0.5%. 
  • However, a clearer division was evident over the effectiveness of additional future asset purchases once the current plan is completed next month.
  • With the recent data having a more optimistic tone, it is not surprising that the Minutes failed to repeat the claim in September that some members felt further policy stimulus was more likely than not.
  • DE View: With three of nine MPC members wary of future asset purchases and stronger data, this argues against the BoE next month adding further to the asset purchase program.

 

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