No Changes Made by Bank of England Monetary Policy Committee

May 5, 2011

May is one of the four months of the year in which the Bank of England updates its inflation forecast.  Often in the past, policy changes were synchronized with the release of those updates, which occur also in November, August, and February.  The Inflation Report is due on May 11, but the Monetary Policy Committee did not use this opportunity to begin tightening its accommodative policy stance.  Not that such a move had been expected.  As noted in my earlier preview of today’s announcement, a spate of disappointing data and unexpected drop in U.K. inflation had sealed the deal against any move to tighten.

Today’s new statement from the Bank of England contains the minimal information and no clues to what the policymakers are presently thinking.  As is their desire when not changing policy, they will let the minutes of the meeting, due May 18, perform that role.  The last Bank Rate change was made in March 2009.  The last increase in the asset purchase program was announced in November 2009 and reached in January of last year.  The Bank Rate is 0.5%, and the APP limit is at GBP 200 billion.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.



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