BOE CHECKLIST: What the BOE Said on Policy Outlook, Inflation
(Bloomberg) -- U.K. rate setters said that monetary policy could be eased further or tightened in response to changes in the economic outlook, as the BOE left policy on hold.
- The key points from BOE statements follow; monetary policy summary here and Inflation Report here
- Governor Mark Carney will hold a press conference at 12:30 GMT
DID BOE ADJUST RATES, QE?
- The bank kept key rate at 0.25%, the gilt purchase program at GBP435b, and the corporate-bond plan at GBP10b
- The BOE said weekly QE auctions will be GBP1b for each maturity bucket
- Analysts no longer expected any easing this month after stronger than forecast 3Q; Goldman pushed back its BOE rate cut call to Feb. from Nov. and HSBC no longer expects the bank to cut rates this month
HOW SPLIT WAS THE VOTE?
- MPC voted 9-0 on all 3 decisions. Forbes, McCafferty oppose QE, but didn’t vote against it
- Analysts surveyed by Bloomberg expect an 9-0 vote to leave rates unchanged
WHAT DID CARNEY SAY ABOUT FUTURE POLICY DIRECTION?
- Bank says “monetary policy could respond, in either direction, to changes in the economic outlook as they unfolded”
- Says previous guidance on likelihood of another rate cut has “expired”
WHERE DOES THE BANK SEE INFLATION?
- BOE raises inflation forecasts over entire forecast period
- BOE raises 2017 CPI forecast to 2.7% from 2%, 2018 prediction to 2.7% from 2.4%
- Sees inflation staying above 2% to the end of the forecast period
WILL BOE LOOK THROUGH HIGHER INFLATION?
- BOE says it has limited tolerance for above-target CPI
- Mark Carney had earlier told a House of Lords Committee in London that there are limits to the MPC’s willingness to look through an overshoot of inflation
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