BOE MPC voted 6-3 to hold rates in Feb

inspector_monkfish

09:30 23Feb11 - BOE MPC VOTED 6-3 TO HOLD RATES IN FEB, DALE AND WEALE VOTED FOR 25 BPS HIKE, SENTANCE +50 BPS - MINUTES

09:30 23Feb11 - BOE MPC VOTED 8-1 TO KEEP QE AT 200 BLN STG, POSEN VOTED FOR EXTRA 50 BLN STG

09:30 23Feb11 - BOE - MOST MEMBERS AGREED MEDIUM-TERM INFLATION RISKS HAD RISEN, CASE FOR WITHDRAWING STIMULUS HAD STRENGTHENED

09:30 23Feb11 - BOE - MEMBERS WHO OPPOSED RATE HIKE BUT SAW GREATER INFLATION RISK WANT TO SEE IF Q4 GDP DECLINE SUSTAINED

09:30 23Feb11 - BOE - Q4 GDP WEAKNESS COULD BE TEMPORARY OR EARLY SIGNAL OF WORSENING OUTLOOK FOR GROWTH

09:30 23Feb11 - BOE - HIGH INFLATION COULD PERSIST DUE TO COMMODITY PRICES OR ACCOMMODATIVE MONETARY POLICY IN EMERGING MARKETS

09:30 23Feb11 - BOE - INFLATION EXPECTATIONS A RISK, THOUGH LIMITED EVIDENCE THEY HAVE RISEN MATERIALLY YET
09:30 23Feb11 - BOE - DALE AND WEALE FAVOUR SMALLER RATE RISE DUE TO ECONOMIC UNCERTAINTY

09:30 23Feb11 - BOE - SENTANCE FAVOURED LARGER RATE RISE DUE TO MOUNTING EVIDENCE FIRMS ARE PASSING ON HIGHER COSTS, NOMINAL DEMAND GROWING

09:30 23Feb11 - BOE - POSEN ACCEPTED RISING GLOBAL DEMAND OR SHIFT AGAINST STERLING COULD OUTWEIGH DOMESTIC DOWNWARD PRESSURE ON CPI, BUT NOT THERE YET


09:30 23Feb11 - BoE voted 6-3 to hold rates in Feb, Dale joins hawks

LONDON, Feb 23 - Bank of England chief economist Spencer Dale joined Andrew Sentance and Martin Weale in voting for higher rates in February, minutes to the Bank of England's Feb. 9-10 meeting showed on Wednesday.

Moreover, the minutes also suggested that some of those opposed a rate hike this month would consider if it if the economy shows signs of picking up after an unexpected fall in output at the end of 2010.

"Most members agreed that the balance of risks to inflation in the medium term relative to the target had moved upwards in recent months and that the case for withdrawing some of the current exceptionally accommodative monetary policy had consequently been strengthened," the minutes said.

Economists had expected a repeat of last month's 7-2 vote, though another member joining the BoE's hawkish camp had been seen as a possibility after BoE Governor Mervyn King said last week that the MPC was unusually divided.

Inflation is currently 4 percent, double the BoE's 2 percent target, but last week the central bank forecast it would fall below target in 2 years if interest rates rise gradually.

Dale and Weale both called for a 25 basis point increase in the BoE's record low 0.5 percent interest rate, while Sentance said the time had come for a 50 basis point rise.

Dale and Weale favoured a smaller rate increase than Sentance because they believed there was greater uncertainty about the economic outlook. Sentance was concerned that firms were passing on higher costs.

Adam Posen repeated his call for a 50 billion pound expansion to the BoE's programme of quantitative easing asset purchases to 250 billion pounds.

But he acknowledged that a sustained increase in global demand or a shift in sentiment against sterling could outweigh domestic downward pressures on inflation, but he did not see this risk as large enough to require tighter policy now.

The minutes follow a BoE quarterly Inflation Report which suggested rates may have to rise two or three times this year for the central bank to have an optimal chance of getting inflation back on track in the medium term.

The minutes showed that the MPC saw upward risks to inflation from commodity prices, loose monetary in emerging markets and inflation expectations -- though there was little evidence that the last of these had increased materially.

bendix

It's coming boys. It's coming very soon.

doire_2

Wont be long now

Generali

From the horse's mouth:

The Governor invited the Committee to vote on the propositions that:

Bank Rate should be maintained at 0.5%;
The Bank of England should maintain the stock of asset purchases financed by the issuance
of central bank reserves at £200 billion.

Regarding Bank Rate, six members of the Committee (the Governor, Charles Bean, Paul Tucker, Paul
Fisher, David Miles and Adam Posen) voted in favour of the proposition. Three members of the
Committee voted against the proposition. Andrew Sentance preferred to increase Bank Rate by 50
basis points. Spencer Dale and Martin Weale preferred to increase Bank Rate by 25 basis points.

Regarding the stock of asset purchases, eight members of the Committee (the Governor, Charles Bean,
Paul Tucker, Spencer Dale, Paul Fisher, David Miles, Andrew Sentance and Martin Weale) voted in
favour of the proposition. Adam Posen voted against the proposition, preferring to increase the size of
the asset purchase programme by £50 billion to a total of £250 billion.

Remember, there is nothing that says that base rates have to change by 0.25% (25 basis points) each time. If interest rates rise they may well rise faster and higher than many expect.

Graham_Devon

Generali wrote: »

If interest rates rise they may well rise faster and higher than many expect.

And the longer you hold off, the more likely this is to happen.

Heard one person talking on the radio the other day saying the fire is now uncontrollable, too little has been done and its all been left too long.

inspector_monkfish

This result is actually better than the markets expected.

Sterling Futures are now HIGHER than they were before the announcement.

angrypirate

inspector_monkfish wrote: »

This result is actually better than the markets expected.

Sterling Futures are now HIGHER than they were before the announcement.

Of course they are. And if interest rates rise next month then sterling will get stronger again. The cost of imports goes down due to a stronger sterling and hence inflation is curbed. Well, partially curbed anyway

maveli

What will happen if 4 vote for hold, 4 for 0.25 and one for 0.5 ? is the result hold ?

inspector_monkfish

angrypirate wrote: »

Of course they are. And if interest rates rise next month then sterling will get stronger again. The cost of imports goes down due to a stronger sterling and hence inflation is curbed. Well, partially curbed anyway

why do you say "Of Course they are" - this wasnt expected...

immediately after the announcement, SS Futures came off, now half hour later they are back up as the markets are digesting the MPC info and realising its not what they first thought...

Cable is also now lower than where it was at the time of the announcement.

inspector_monkfish

maveli wrote: »

What will happen if 4 vote for hold, 4 for 0.25 and one for 0.5 ? is the result hold ?

Extra Time, then Penalties....

angrypirate

maveli wrote: »

What will happen if 4 vote for hold, 4 for 0.25 and one for 0.5 ? is the result hold ?

Logic says that it would go with the 0.25 raise, but i dont know this for certain.