Halister News

(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