United Kingdom Monetary Policy

United Kingdom

United Kingdom: Bank of England leaves rates unchanged, turns more hawkish

April 24, 2012

At its 4-5 April meeting, the Bank of England (BoE) left the Bank rate unchanged at 0.50% and maintained its asset purchase programme (quantitative easing) at GBP 325 billion. Both decisions were expected by most market analysts. Meanwhile, the minutes released on 18 April show that the Monetary Policy Committee (MPC) is turning more hawkish. All nine members of the MPC voted in favour of leaving the Bank rate unchanged at 0.50%, while eight voted to maintain the asset purchase programme at its current size. The result marked a change over the previous meeting, when only seven members voted to maintain the asset purchase programme unchanged. Moreover, the BoE stated that "the news about the near-term path for inflation was unwelcome" and added that "there was a greater chance than before that above-target inflation would persist into the medium term, whether because of elevated external price pressures, a rebuilding of margins or a rise in costs".


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