BoE Minutes Show 9-0 Vote To Leave Rates/QE On Hold
The minutes of the MPC's February 3-4 meeting showed a unanimous 9-0 vote in favour of leaving interest rates and QE on hold this month.
Some analysts had been expecting one or two committee members to vote in favour of increasing the bank's GBP200 billion asset purchase programme.
A 9-0 vote saw the pound rise further against the dollar, as it would appear to allay fears that more government debt might have to be incurred to attempt to drag us out of recession.
As ever it's not all good news for the pound though, jobless claims rose by 23,500 last month, confounding pundits' predictions of a 10,000 fall. The total number of UK claimants now stands at its highest levels since 1997.
Bank of England Lowers Growth Forecast
The Bank of England today lowered it's assessment of the economic outlook in the UK and forecast inflation to exceed 3% in January.
The BoE now appears more cautious in it's outlook than in it's previous November Quarterly Report, saying that economic growth is set to reach only around 3.2% by the second quarter of next year - considerably smaller than their previous estimate of 4%.
The bank also said that the outlook for inflation was that it will peak at around 3.3% before slowing to 0.9%, warning that things looked "unusually uncertain".
Bank of England Leaves Rates On Hold
As was widely expected the Bank of England announced at noon that they were leaving UK interest rates on hold at the all-time historic low of 0.5%.
There were no changes announced to the GBP200 billion asset purchase programme either. That's money well spent isn't it? Two hundred billion quid to generate growth of 0.1% in the last quarter.
How much would it cost to get something a bit more tangible?
Sterling pushed higher against the dollar and euro immediately following the news.
The ECB are next up with their announcement at 13.45 GMT.
As has been the trend recently, it will be the exact wording of accompanying statements that the forex markets will react to.
Bank Of England Leaves Rates On Hold
The Bank of England surprised nobody by leaving UK interest rates on hold at 0.5% today. Neither did they announce any further tinkering with the existing GBP200 billion quantitative easing measures.
As has become the pattern of late, with rates at a half percent the minutes of the meeting are now of more import than the actual announcement itself.
The currency markets were unmoved, with the pound in danger of slipping below 1.59 against the dollar on concerns about a leadership challenge to Gordon Brown, or Mr Magoo as I now call him.
A more insincere snake in the grass looking person than Geoff Hoon I can't imagine. Still if he ends up with egg all over his face a career in the grain trade surely beckons.
The reaction of those members of the Cabinet hastily interviewed on the BBC last night about a possible title challenge could hardly be called unequivocal support could it? David Milliband scurrying inside muttering something about having left the kettle on, whilst Alistair Darling did his familiar buttock-shifting squirm.
BoE Leaves Rates/QE On Hold
As widely expected the Bank of England's Monetary Policy Committee today left UK interest rates on hold at 0.5%, and made no addition to the GBP200 billion asset-purchase program.
We won't know until the minutes of the meeting are released later this month, if any of the MPC wanted to add to last month's GBP25 billion increase in QE.
The pound is flat just under 1.63 against the dollar and around 1.1050 against the euro.
BoE Increase QE By GBP25 Billion
The BoE's MPC have announced that the simply don't think that GBP175 billion is enough, and have decided to increase QE by a further GBP25 billion.
Interest rates, unsurprisingly, were left unchanged at 0.5%.
The currency market appears unmoved by the news, maybe even relieved that it's not GBP50 million?
The pound currently stands at 1.6580 against the dollar, having briefly popped it's head above 1.6600.
BoE Voted 9-0 To Maintain Current Policy
BoE minutes from the July 8-9 meeting showed that MPC members voted unanimously to maintain the existing 0.5% base rate.
The minutes also reveal that members discussed if an "immediate change" to the asset purchase target of at £125bn was required.
They concluded that there had not been enough new evidence to justify this and that the August Inflation Report would "provide an opportunity to reassess the stock of asset purchases".
BOE Cuts Rates By Half Point, Pound Goes Through USD1.46
As widely anticipated the Bank of England has cut interest rates by a half point to a fresh historic low of 1 percent.
A decision by the European Central Bank is due around 12.30 GMT. A more cautious approach is expected from the ECB, with the market anticipating rates in the Euro Zone to be left unchanged.
With rates already so low many analysts believe that today's change will do very little to stimulate economic growth.
The pound broke through the $1.46 level against the dollar shortly after the news, to push to its highest level since Jan 19.
In the US base rates are 0.25 percent and in Japan just 0.1 percent.
With levels this low there's not a lot of bullets left.
What To Expect Today From The BOE, ECB
Interest rate announcements from the European Central Bank and the Bank of England headline the economic calendar today. In the UK, policymakers are expected to cut interest rates by 50 basis points to bring borrowing costs to 1%, the lowest ever.
The ECB however is thought likely to keep interest rates on hold at 2% despite mounting threats to economic growth and record-low inflation.
Unlike with the BOE, for the ECB there have only been three weeks between the January and February announcements and policymakers have indicated a desire to wait and see the tone of “new information”.
Whereas the BOE decision seems generally clear cut, the ECB announcement stands to create substantial volatility as traders scrutinize the wording of the statement accompanying the release.
New Legislation Will Allow BoE To Print More Money In Secret
The Bank of England will be able to print extra money without having legally to declare it under new legislation, heightening fears that the Government will secretly pump extra cash into the economy.
The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel's Government in 1844.
The supposed reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future.
However, some have warned that it means: "there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses."
BOE Minutes Reveal Blanchflower Voted For 100bps Cut
The release of the minutes of the Bank of England's Jan 8 meeting revealed that David Blanchflower voted for a interest rate cut of a full one percent.
The vote was split 8-1, with Blanchflower the only dissenter, the rest of the panel voting for a cut of a half point.
A half point cut could still have a "significant effect on the income of many businesses and households," according to the minutes.
It was also mentioned that a more aggressive stance, as favoured by Blanchflower, might spook the markets, damaging the economy further.
BOE Minutes Show Larger Rate Cut Was Considered
The Bank of England's rate-setting body voted 9-0 to cut rates to 2% this month and considered a bigger move, minutes from its meeting released today have shown.
The monetary policy committee (MPC) agreed that a cut in the Bank rate from 3% to 2% was the minimum needed.
However, it avoided a deeper cut on concerns it could hit the pound and undermine confidence in the economy.
The minutes are likely to reinforce expectations that UK rates will fall further in the months ahead.
The MPC appeared to welcome the sharp fall in sterling in recent weeks, saying it should support the economy by boosting export growth while the fall in the oil price would lift consumer spending power.
In today's minutes the MPC also noted the importance of getting banks lending again but added that interest rates alone would not be enough to tackle limited credit availability.
"Further measures to underpin lending growth would be needed, building on the government's package announced in October to recapitalise and guarantee funding to the banks," they said.
BOE Cuts Interest Rates To Lowest In 300 Years
The Bank of England has cut interest rates by one percentage point to 2%.
The cut was widely anticipated by analysts.
UK interest rates are now at their lowest level since the BOE was founded in 1694 (they were also briefly at 2% in 1951).
The pound jumped immediately following the decision, suggesting that some participants had been expecting a cut of even more. Having touched an intra-day and 6 year low of $1.4470 in earlier trade, at 12.05pm GMT the pound was at $1.4626.
The ECB is expected to follow suit with a half percent rate cut shortly after 12.30GMT.
BOE Voted 9-0 For Rate Cut
The Bank of England's interest rate setters voted unanimously to cut interest rates from 4.5% to 3% on 6 November, but considered a bigger cut.
The minutes from the meeting show that they decided a bigger cut would risk shocking the markets too much.
But there were suggestions that there may be further cuts in interest rates in the coming months.
The one-and-a-half percentage point cut was the biggest since 1981, taking rates to the lowest level since 1955.
The minutes said that rates might have to be cut to 2.5%, or even lower, to stop inflation falling too far below the Bank of England's target next year.
BoE: Well You Wanted Something Decisive, Cop This
In a shock move, the Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, the lowest since 1955.
There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.
Few, however, had expected a cut as decisive as this.
It is the first time the Bank has cut rates by more than half a percentage point since gaining its independence in 1997.
The problem recently, however, has been getting British banks to pass on rate cuts to their borrowers.
Intriguingly, Lloyds TSB CEO Eric Daniels and bezzie mate of Gordon McBroon, has been quoted as saying that they will never charge borrowers more than 2% above Bank of England base rate. It's standard variable rate is currently 6.5%, will they deliver?
Further evidence that the UK is sinking into recession came with the news that in October UK new car registrations were down 23% on 2007.
Pound Advances As BoE Leaves Interest Rate Unchanged
As widely expected, the Bank of England left the benchmark interest rate unchanged at 5% thursday. Following the announcement, the pound advanced against its major counterparts. Shortly after the decision was announced the pound was trading around a cent higher against the dollar at 1.7808 and at 0.8122 versus the euro.
Grim backdrop to UK rate decision Thursday
The looming threat of recession has left the Bank of England under intense scrutiny as it prepares to announce its latest interest rate decision.
The Bank's Monetary Policy Committee is expected to keep rates on hold at 5% on Thursday despite evidence the economic outlook is fast deteriorating.
Output ground to a halt in the second quarter while consumer confidence has been shaken by tumbling house prices.
Many economists expect rates to fall soon despite inflation worries.
The threat of inflation, which has risen sharply to 4.4% in recent months, has deterred policymakers from taking any action.
But the fear of a prolonged recession over the next 18 months is expected to sway the MPC to ease borrowing before the end of 2008.
The OECD has forecast that the UK economy will contract in the current quarter and the next - meeting the official definition of a recession.
Chancellor Alistair Darling heightened concerns about the resilience of the economy when he said recently that conditions facing the UK and other countries were "arguably the worst in 60 years".
A three-way voting split on the MPC in recent months has highlighted the difficulties facing the body in the current troubled climate.
Arch-dove David Blanchflower has persistently called for rate cuts to support the faltering economy and has warned of a sharp jump in unemployment if no action is taken.
However, another external member of the MPC, Tim Besley, remains more hawkish, urging a rise in rates to contain inflation which many experts believe could soon hit 5%.
While the other seven members of the MPC have voted for rates to stay on hold for several months, many experts believe they will not be able to hold this line for much longer.
"It now seems a question of when, rather than will, the Bank of England cut rates," said Howard Archer, chief economist at Global Insight.
"The MPC has clearly become markedly more concerned about the current state of the economy and the growth outlook in recent weeks, acknowledging that recession is very possible."
BOE Voted 7-2 To Keep Rates Unchanged
The Bank of England voted 7-2 to keep the current Bank Rate unchanged at 5% in it's most recent MPC meeting on Jul 9th/10th.
The Bank says the decision was a difficult one with Tim Besley voting for a 25 point increase and David Blanchflower voting for a reduction of 25 basis points.
The MPC stated that the path of inflation would likely be higher than forecasted and that the housing downturn has gathered momentum and the slowdown to growth was more pronounced than forecasted. The committee chose to leave the rate unchanged to send a strong message on inflation with Besley calling for the central bank to anchor inflation to ensure credibility.
The perennial dove Blanchflower voted for a 10th consecutive month to cut rates.
BoE holds interest rates as expected
LONDON (AP) — The Bank of England has kept its benchmark interest rate unchanged at 5 percent.
The decision Thursday confirms expectations by economists that policymakers are now more concerned about surging inflation than the slowing domestic economy.
It is the third consecutive month the bank has held rates steady. It had made two quarter-point cuts earlier in the year amid signs that the economy is heading for a significant downturn as the housing market stalls and consumer confidence falls.
"We still think the next move will be down," said Vicky Redwood, an economist at Capital Economics. "It might not be for a few months yet, although if the activity data continues to weaken sharply as it has done in recent weeks then we might not have to wait too long."
However, further cuts could spur inflation, which is already well above the bank's 2 percent target rate, and some economists now expect the next move from the bank to be a rise in interest rates.
However, the minutes to this week's decision -- due on July 23 -- could show a split among policymakers.
Arch dove David Blanchflower is unlikely to have dropped his call for lower interest rates but there is also plenty on the inflation front for hawks such as Andrew Sentance and Timothy Besley to argue that rates need to stay on hold for some time.
Pound surges against majors following BOE minutes
(RTTNews) - Following the release of the Bank of England's minutes at 9.30BST, the British pound surged against its major counterparts. As of 9:32 am BST, sterling was quoted at 1.9676 against the dollar and 0.7991 versus the euro.
More to follow.
