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BoE minutes likely to show MPC split on QE vote
inspector_monkfish
Posts: 9,276 Forumite
15:20 17Nov09 BoE minutes likely to show MPC split on QE vote
* What: Minutes to Bank of England's Nov 4-5 rate meeting
* When: Wednesday, Nov 18, 0930 GMT
* Markets eager for clues on whether QE nearing an end
LONDON, Nov 17 - Investors hope to find out on Wednesday whether the Bank of England really might consider more economic stimulus, or whether its quantitative easing programme is now drawing to a close.
The central bank's decision earlier this month to halve the pace of its asset purchases led many to believe its QE programme was being wound down.
So it came as a surprise last Wednesday when Bank Governor Mervyn King unveiled a benign set of inflation projections and said the Monetary Policy Committee was "completely open-minded" whether more asset purchases would be needed or not.
King referred to a "range of views" on the committee, and it is highly likely this month's decision to expand QE by 25 billion pounds was not a unanimous one.
George Buckley, chief UK economist at Deutsche Bank, said dissenting votes were more likely to have been in favour of a 50 billion pound increase rather than none at all, but said November's voting pattern was difficult to predict.
"I wouldn't be surprised to see a 7-2 or a 6-3 outcome. The big question is whether Mervyn King was outvoted again," Buckley said.
King was outvoted in August when he called for a 75 billion pound top-up of the QE programme, more than the 50 billion increase that was ultimately agreed. It was only the third time King had been outvoted since becoming governor in 2003, and the first time he had been outvoted when taking a more dovish stance.
KING IN MINORITY?
When presenting the BoE's quarterly inflation report last week, King sounded a downbeat note on the country's recovery prospects -- something economists found hard to square with the central bank's projections of growth accelerating to 4 percent by the start of 2011.
King also shrugged off as "peculiar" any worries about another asset price bubble developing, something other MPC members have voiced concern about.
David Page, an economist at Investec, said it was possible November's minutes could show the first three-way split since September 2008, with some members, possibly including Andrew Sentance, voting for no increase in QE at all.
"After the confusingly mixed messages projected in November's report, we welcome the prospect of further light being shed on the monetary policy outlook," he said.
"Based on the Bank's Inflation Report forecasts we expect some members to have been wary of continuing with QE."
The nine committee members are all expected to have voted unanimously to leave interest rates unchanged at a record low 0.5 percent. Most economists do not expect British interest rates to rise until the middle of 2010 at the earliest. A few reckon they could even stay on hold until 2011.
Regarding quantitative easing, Mervyn King and the MPC's two newest recruits, Adam Posen and David Miles, are viewed as the most likely to have voted for a bigger QE boost.
Andrew Sentance, Paul Fisher and chief economist Spencer Dale are seen as possible candidates wanting to pause.
* What: Minutes to Bank of England's Nov 4-5 rate meeting
* When: Wednesday, Nov 18, 0930 GMT
* Markets eager for clues on whether QE nearing an end
LONDON, Nov 17 - Investors hope to find out on Wednesday whether the Bank of England really might consider more economic stimulus, or whether its quantitative easing programme is now drawing to a close.
The central bank's decision earlier this month to halve the pace of its asset purchases led many to believe its QE programme was being wound down.
So it came as a surprise last Wednesday when Bank Governor Mervyn King unveiled a benign set of inflation projections and said the Monetary Policy Committee was "completely open-minded" whether more asset purchases would be needed or not.
King referred to a "range of views" on the committee, and it is highly likely this month's decision to expand QE by 25 billion pounds was not a unanimous one.
George Buckley, chief UK economist at Deutsche Bank, said dissenting votes were more likely to have been in favour of a 50 billion pound increase rather than none at all, but said November's voting pattern was difficult to predict.
"I wouldn't be surprised to see a 7-2 or a 6-3 outcome. The big question is whether Mervyn King was outvoted again," Buckley said.
King was outvoted in August when he called for a 75 billion pound top-up of the QE programme, more than the 50 billion increase that was ultimately agreed. It was only the third time King had been outvoted since becoming governor in 2003, and the first time he had been outvoted when taking a more dovish stance.
KING IN MINORITY?
When presenting the BoE's quarterly inflation report last week, King sounded a downbeat note on the country's recovery prospects -- something economists found hard to square with the central bank's projections of growth accelerating to 4 percent by the start of 2011.
King also shrugged off as "peculiar" any worries about another asset price bubble developing, something other MPC members have voiced concern about.
David Page, an economist at Investec, said it was possible November's minutes could show the first three-way split since September 2008, with some members, possibly including Andrew Sentance, voting for no increase in QE at all.
"After the confusingly mixed messages projected in November's report, we welcome the prospect of further light being shed on the monetary policy outlook," he said.
"Based on the Bank's Inflation Report forecasts we expect some members to have been wary of continuing with QE."
The nine committee members are all expected to have voted unanimously to leave interest rates unchanged at a record low 0.5 percent. Most economists do not expect British interest rates to rise until the middle of 2010 at the earliest. A few reckon they could even stay on hold until 2011.
Regarding quantitative easing, Mervyn King and the MPC's two newest recruits, Adam Posen and David Miles, are viewed as the most likely to have voted for a bigger QE boost.
Andrew Sentance, Paul Fisher and chief economist Spencer Dale are seen as possible candidates wanting to pause.
Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)
(MSE Andrea says ok!)
0
Comments
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I like having these posts for chewing on overnight.
I also like (as exemplified on another thread) how when people ask some questions (eg will QE continue) how rather than give an opinion, instead you (teasingly?) respond that the minutes of the BoE meeting (to be published) should give an indicator.
Nothing given away! I assume part of the role you do?It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
lemonjelly wrote: »I like having these posts for chewing on overnight.
I also like (as exemplified on another thread) how when people ask some questions (eg will QE continue) how rather than give an opinion, instead you (teasingly?) respond that the minutes of the BoE meeting (to be published) should give an indicator.
Nothing given away! I assume part of the role you do?
hehehe
don't read to much into it jelly - you'll make your brain hurt !!
i'm simply posting an article i just read that i think gives a fair opinion of what may or may not happen tomorrow, that i thought you guys might find interestingPlease take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
inspector_monkfish wrote: »hehehe
don't read to much into it jelly - you'll make your brain hurt !!
i'm simply posting an article i just read that i think gives a fair opinion of what may or may not happen tomorrow, that i thought you guys might find interesting
Methinks you are being to modest pehaps!
But appreciate the info for the thinking stuff - even though I'm no good at getting it!:oIt's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
lemonjelly wrote: »Methinks you are being to modest pehaps!
But appreciate the info for the thinking stuff - even though I'm no good at getting it!:o
i think you understand it better than u let on - and certainly better than most on here !!:D Please take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
inspector_monkfish wrote: »hehehe
don't read to much into it jelly - you'll make your brain hurt !!
i'm simply posting an article i just read that i think gives a fair opinion of what may or may not happen tomorrow, that i thought you guys might find interesting
very
there result will show how stretched the deficit is0
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