The Bank of England is due to publish the minutes of the Monetary Policy Committee`s meeting held on April 3 and 4, when policymakers voted to maintain record low interest rates and the size of asset purchases for the fourth consecutive month this year.
Market participants await further updates about the ongoing debate over monetary stimulus. Three members of the MPC are apparently holding grounds in favor of increasing the size of the asset-purchase program by a further 25 billion pounds to a total of 400 billion pounds.
In February, the case of embarking additional monetary stimulus got even stronger as Governor Sir Mervyn King and Paul fisher joined the dovish camp of David Miles, calling to expand monetary stimulus. However, the MPC decided to keep the stock of APF at 375 billion pounds.
An unexpected drop in UK inflation last month could give a leeway to policymakers to extend stimulus measures from incoming BoE Governor Mark Carney. The Consumer Price Index (CPI), a gauge of inflation, fell in April for the first time since September, to 2.4% from 2.8%.
Expectations are building up for another month of MPC split-vote but few analysts believe other members could join the dovish camp and call for additional monetary easing. The central bank kept the key interest rate at 0.50. A change in the APF vote, however, is unlikely this month.
The sterling pound is under the heels of the U.S. dollar today trading thin at $1.5146 ahead of the MPC vote on the rates and APF. A surprising swing in the dovish mood will press even harder on British stocks and the currency, still seeking a solid rebound from this year’s lows of $1.48.
The minutes of the Committee will be published at 09:30 a.m. in London.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.