BoE Held Rate On 6-3 Vote Amid Concerns About Consumer Morale: Minutes
The Bank of England's rate-setting body decided by a split vote to leave
the key interest rate unchanged this month on concerns over consumer
spending, the minutes of the meeting revealed Wednesday.
The Monetary Policy Committee (MPC) led by Governor Mervyn King voted
6-3 to hold the key interest rate at its record low of 0.5 percent. The
voting pattern has remained the same since February. The meeting was
held on May 4 and 5.
"An increase in Bank Rate in current circumstances could adversely
affect consumer confidence, leading to an exaggerated impact on both
spending and firms' perceptions of their desired productive capacity,"
the minutes said.
"And, were the downside risk to household spending to materialize, a
path for policy weaker than that implied by market prices might become
appropriate."
Policymaker Andrew Sentance, who is set to step down on May 31,
continued to seek a 50 basis point hike, while fellow MPC members
Spencer Dale and Martin Weale called for a quarter point increase.
Sentance will be succeeded by Ben Broadbent, who is seen less hawkish
than his predecessor.
The rate-setting body split 8-1 on the decision to maintain the size
of asset purchases at GBP 200 billion. Policymaker Adam Posen maintained
his call for a GBP 50 billion increase in the size of the asset
purchase programme.
Official figures released today showed that the number of Britons
claiming jobless allowance increased in April at the sharpest pace since
the beginning of last year as the U.K. private sector struggles to
compensate for job losses in the public sector due to the government
spending cuts. Claimant count rose by 12,400 month-over-month to 1.47
million in April.
U.K. Inflation jumped to a bigger-than-expected 4.5 percent in April,
the highest in thirty months. With inflation staying above the central
bank's 2 percent target for the seventeenth consecutive month, the
central bank governor was forced to write his sixth consecutive letter
to the Chancellor explaining why inflation has moved away from target
and the policy action needed.
King expects the rate to pick up further in the next few months with
the increase in energy prices seen taking petrol prices even higher.
Core inflation climbed to a record high 3.7 percent in April.
The pace of recovery was more likely than not to pick up from its
recent soft patch, the minutes said. The U.K. economy expanded 0.5
percent sequentially in the first quarter, offsetting the 0.5 percent
contraction in the previous three months. Most MPC members expect high
unemployment to persist for sometime, the minutes said.
For the three members seeking policy tightening, the arguments for a
hike remained strong and the projections in the May inflation report
underpinned the view. While two of the members regarded a rate hike now
as "finely balanced", Sentance saw the risks around the inflation target
"significantly to the upside".
Meanwhile, other members said there was little evidence that elevated
inflation expectations were becoming entrenched in wage and
price-setting, though the risk remained material.
"It was still too early to know whether the softening in activity was
temporary and, notwithstanding the expected unevenness in output growth,
the coming months could be revealing about the underlying strength of
demand," they said.
"In time, some withdrawal of stimulus would become necessary. But the
May Inflation Report projections implied that this did not need to occur
immediately."
In the highly uncertain environment, the best that the MPC members can
do is to remain in a wait-and-see mode, Daiwa Capital Markets Europe
Economist Hetal Mehta said. The economist expects no move from the MPC
this year as it continues to assess the progress of household
balance-sheet restructuring and the full impact of fiscal tightening
against the forecast for very subdued consumer spending.
(Market News Provided by RTTNews
räumung wien -
entsorgung wien -
reinigung Wien -
wohnungsreinigung wien -
umzug wien -
yallakora -
entsorgung wien -
umzug wien -
wohnungsräumung wien -
entsorgung -
entsorgung wien -
entsorgen -
entrümpelung -
entruempelung -
umziehen wien -
Umziehen -
umziehen -
forex news -
forex training -
forex trading -
umzug wien -
umzug
loan,plastic,blood,Medicine,eye,ear,alternative,medicine,medical,Surgery,Plastic,cardiac,heart,cardiology,Oncology,Diabetes,blood,forex,health,sexual,news,palliative,loan
,alternative,mind,geriatric,orthopedic,plastic,oncology,uro,cardiology,nephrology,kidney,blood.haematology,psychiatry,skin,derma,gland,endocrinology,chest,sex,alternative,
stomach,liver.intestine,pancrease,uterus,ovary,children,neonat,boy,parent,eye,ophthalmology,epidemics,endemic,ear,nose,throat,physiology,anatomy,micro,bio,forex,anus,
biochemistry,histopathology,toxic,poison,forensic,Palliative,Care,medicine,life,vagin,rent,books,palliative,rent,loan,newborn,nutrion,cosmotic,forex,foot,pelvis,family,surgery,