Bank of England Policy Remains Paused

January 8, 2015

The Bank of England left its 0.5% Bank Rate (since March 2009) again unchanged and did not modify the limit of its quantitative stimulus (last expanded in July 2012 by 50 billion pounds to its present size of GBP 375 billion, which was reached four months later).  Minutes of this week’s meeting will be published on January 21st, according to a statement from the Monetary Policy Committee.  While members Martin Weale and Ian McCafferty dissented in favor of a 0.75% bank rate level at the meetings since August, the 7-member majority remains stoutly guarded against premature tightening especially in light of strong disinflationary pressures.  CPI inflation of 1.0% is at a 12-year low and was below target since February.  One of the big guessing games of 2015 will be whether the Federal Reserve or the Bank of England is the first to raise interest rates.  Most analysts are picking the Fed to move before the Bank of England.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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