No Changes Announced By Bank of England Monetary Policy Committee

August 5, 2010

The Bank of England as expected left its Bank Rate at 0.5% and its asset purchase program ceiling at Gbp 200 billion and released a bare bones statement informing investors that minutes of this month’s meeting will be published August 18th, one week after the scheduled quarterly Inflation Report due August 11.  The statement gave no indication of the policy committee’s latest thinking.  The last rate cut occurred in March 2009, the same time that the asset buying scheme was introduced.  The ceiling of that program was last increased in November 2009 and reached by the end of January of this year.  For background on today’s meeting, please read my preview.

The Bank of England’s Bank Rate previously peaked at 5.75% from July 2007 until early December 2007.  By the time the world recession intensified in September 2008, officials had implemented three 25-basis point cuts, respectively in December 2007, February 2008, and April 2008 to 5.0%.  The key rate was then cut by 50 bps in October 2008, 150 bps in November, 100 bps in December, and 50 bps in each month of the first quarter of 2009 to its present record low.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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