23 Jul 2014
BoE Minutes: Some MPC members see case for rate hike more balanced
FXStreet (Łódź) - BoE Minutes from the MPC monetary policy meeting held on 9 and 10 July and released today reveal that the Committee voted unanimously in favor of maintaining the interest rate at the record low of 0.5% and the program of asset purchases steady at £375 billion, as widely expected.
The central bank suggested that the threat of a small rate increase derailing the economic recovery in the UK lessened and that some of the MPC members saw the case for a hike more balanced in the last few months. The timing of the first rate hike hasn't been specified though, as it will depend on the incoming data.
Furthermore, the minutes stated that the strength of the pound might be reflecting the relative performance of the UK economy. Growth continued at a modest pace but there were indications that it could slow down somewhat in the second part of the year.
The MPC also expressed its preoccupation with sluggish wage growth, especially in the light of the CPI increase to 1.9% in June.
"The weakness of wages in the face of strong rises in employment was becoming more striking, and there was reason to believe both that reductions in labour market slack were taking longer to affect wage growth, and that the effective supply of labour had increased," the minutes said.
The GBP/USD remained steady at 1.7070 following the release.
The central bank suggested that the threat of a small rate increase derailing the economic recovery in the UK lessened and that some of the MPC members saw the case for a hike more balanced in the last few months. The timing of the first rate hike hasn't been specified though, as it will depend on the incoming data.
Furthermore, the minutes stated that the strength of the pound might be reflecting the relative performance of the UK economy. Growth continued at a modest pace but there were indications that it could slow down somewhat in the second part of the year.
The MPC also expressed its preoccupation with sluggish wage growth, especially in the light of the CPI increase to 1.9% in June.
"The weakness of wages in the face of strong rises in employment was becoming more striking, and there was reason to believe both that reductions in labour market slack were taking longer to affect wage growth, and that the effective supply of labour had increased," the minutes said.
The GBP/USD remained steady at 1.7070 following the release.